Novell's basically had $1B cash for over a decade now, and through several acquisitions (SUSE, Ximian, Platespin, others).
I think $1B for the rest of the company is a low bid. Again, it's worth more in pieces, which I would guess would be the primary interest of the hedge fund. They're not delivering much shareholder value with a bid $1 above the current trading price--the stock has fluctuated that much in the past few months. The letter implies they intend to grow the company, but that wouldn't provide additional shareholder value if the company is privately held, would it?