The Waltham, Massachusetts-based Linux and identity management software vendor announced plans to repurchase up to $200m of Novell common stock in September 2005 but since then has been operating under a self-imposed trading blackout.
In a recent announcement to shareholders, the company said it lifted the blackout on March 13, 2006 and started purchasing the shares, and it has now doubled the value of shares it intends to acquire to $400m before April 3, 2007.
The decision to repurchase stock came after public calls to do just that from Blum Capital Partners LP and Credit Suisse First Boston. Blum had written to Novell’s chairman and chief executive, Jack Messman, calling on the company to cut costs, divest non-core businesses, make open source acquisitions, and implement a share repurchase program.
CSFB analyst Jason Maynard had also openly suggested that Novell should focus on software services rather than consulting, increase its emphasis on open source software, and repurchase company stock.
Novell had cash and equivalents of $845.1m at the end of its first quarter ended January 31, 2006, as well as short-term investments of $840.5m.
