Novell shares soar as speculation mounts over Netscape buyout bid

Rumours of a Netscape takeover of Novell swept Wall Street, causing shares in Novell to rocket by 26 per cent earlier this month.

Takeover speculation has been rife at Novell since the abrupt departure of former chairman Bob Frankenberg in August, and the dramatic repositioning of Netware as Intranetware. But it is widely believed that Novell's intranet product line could do with an injection of intranet credibility, which Netscape would bring, while Netscape's weak channel and sales organisation would be massively boosted by Novell's 'red' channel.

Clive Longbottom, analyst at research firm Meta Group, said: 'I've always said that if Novell's shares fell to $9.50 it would be ripe for takeover.

Novell maintains it is worth $7 billion, but it would be easy to pick it up for $2.5 billion to $3 billion.'

But Longbottom questioned whether Netscape has the financial clout to buy Novell. He speculated that a bid by AT&T would make better sense.

AT&T already has Novell as a highly preferred partner and could use Novell to help it sell to network people rather than telecoms managers, he said.

Neither Netscape nor Novell would comment on the rumour.