eWEEK content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More.
Earlier this week, it seemed that the only thing between York Capital buying SCO was the U.S. Bankruptcy Court in Delaware turning the proposed sale down. Then, in a surprise move, on Nov. 20, SCO withdrew its emergency motion asking the court to allow it to sell its assets to York. The question of the day: why?
The deal that York, a New York-based private investment firm, was offering would have paid up to $36 million for SCOs properties. Only $10 million of the deal would have been in cash. SCO would also have gotten a $10 million line of credit to use in its Novell and IBM court battles. If SCO/York actually won any money from its suits, SCO would only get 20 percent of any court-ordered awards up to $10 million. Finally, SCO gets up to $6 million from any joint sales with York of its mobile software lines, Me Mobile and HipCheck.
For a company with a current, Nov. 21, market cap of $4.5 million; the threat of not one, but two Nasdaq delisting notices, and what appears to be certain defeat ahead of it in the last stages of its Novell lawsuits in the U.S. District Court in Utah, the York deal would seem to be too good to be believed. Maybe it was too good to be believed.
Novell and IBM had both, needless to say, filed objections to SCO selling out to York. After all, from where these companies sit, SCO is trying to sell assets that belong to them, not SCO. I doubt that has anything to do with SCOs decision to pull back from the York purchase agreement. I mean, really, when did SCO last pay attention to what IBM and Novell wanted?
While Ive been unable to reach SCO on Nov. 21, the day before Thanksgiving, I think that after looking more closely at the deal, SCO has found enough poison in it to say, “Thanks, but no thanks.”
If you look closely at Yorks proposed purchase agreement, youll see that while SCOs Novell and IBM lawsuits will go on, the company itself, its shareholders and executives have no such assurance.