Novell Acquired: Buying Shares Here Still Makes Sense

| About: Novell, Inc. (NOVL)

As announced this morning, Novell Inc. (NASDAQ:NOVL) is to be acquired by Attachmate Corp. for $6.10 in cash. The stock is currently selling for $5.94.

The deal should close in 3-4 months. Anyone owning the stock at that time will receive $6.10, which represents a 2.7% return. Assuming a 4-month closing period, that represents an annualized return of 8.3%. On a 3-month closing period, the return will be 11.2%.

Considering the profile of this deal, the risk associated with these returns should be viewed as remote. NOVL has been up for sale for several months and has clearly been looked over with several fine-toothed combs.

Given NOVL's assets and the acquisition price, this deal should prove to be very good deal for Attachmate. There are few individual buyers that made sense for NOVL as a whole. However, broken into pieces, NOVL should command significantly more in the marketplace. That may be Attachmate's plan.

Thus, investors should see no reason why this deal shouldn't close at $6.10. In fact, there's probably more of a chance of a higher bid (also remote) than the current deal falling through. Because of this, buying NOVL now represents an attractive balance of risk and reward.

Disclosure: I own shares of NOVL