After several small and less than convincing attempts to diversify away from its almost total dependence on the 1-2-3 spreadsheet, Lotus Development Corp has gone for the big one in its efforts to secure its future as a broad-based software company, reaching agreement in principle to acquire local area network operating software specialist Novell Inc in an exchange of shares. The agreed price – 1.19131 Lotus shares for each Novell out values the Provo, Utah company at a whopping $1,508m at the time the announcement was made, but represents only a tiny premium on the $42.875 at which Novell shares were trading, suggesting that a hostile bidder may well step in to spoil the party. The marriage of 1-2-3 and NetWare would create a group with annual sales well in excess of the $978m combined figure reported by the two companies last year – $556m for Lotus, $422m for Novell. With 1-2-3 Release 3 now shipping and version for IBM 370, Sun Microsystems and DEC VAX computers announced, Lotus is again on the up-and-up after a spell of slumping profits and dull sales caused by delayed product introductions. Novell has had troubles of its own, with business turning weaker last summer. On the operational front, Novell chief executive Ray Noorda will become vice-chairman of Lotus on completion, set for July if all the usual hurdles are cleared.
