Novell Inc and Unix System Laboratories Inc are negotiating for Novell to acquire additional shares in Unix Labs, sources tell our sister paper Unigram.X, which had earlier reported intimations that a deal was cooking. Novell, one of 13 companies to take a minority position in Unix Labs last year, is currently its largest single shareholder after majority owner AT&T Co, and currently owns about 4.6%. It is even suggested that Novell might acquire all of AT&T’s remaining shares – but not at the original valuation – it seems that the $325m at which the company was valued last year for the purposes of the private placing is being reappraised. Unix Labs’ other shareholders, Sun Microsystems Inc, ICL Plc, Amdahl Corp, Fujitsu Ltd, Motorola Inc, NEC Corp, Oki Electric Industry Co, Toshiba Corp, Ing C Olivetti & Co SpA, Tata Sons & Co Pte Ltd and 3i Plc, even together have too small a stake to have much say in what eventually happens or whether Novell takes control. The negotiations – and with them Unix Labs’s desire to conserve cash and pretty up its balance sheet as much as possible – might explain why it has so far put little muscle into marketing Destiny since its announcement in June. Unix Labs is believed to be interested in aligning itself more closely with Novell to strengthen its forces for the war against Microsoft Corp’s NT, a herculean effort AT&T may not be as willing to put its back into. AT&T originally talked about decreasing its ownership by taking the company public, an event that was unlikely to take place for at least another year. That avenue is now regarded in some quarters as not nearly as strategic as cuddling up with Novell, despite the disappointment Unix Labs employees might feel in not being able to cash in their stock and options that way. Novell believes system software is one of the least assailable markets to be in during the coming decade. It would have bought all of Unix Labs last year if it could have got it, Novell executive vice-president Kanwal Rikki previously told Unigram. Novell made an unsuccessful pitch for Santa Cruz Operation Inc back in 1990, but it did strike pay-dirt with its agreed offer for Digital Research Inc and DR DOS.
