Novell broke its 18-day silence late Saturday morning and rejected the unsolicited $5.75-a-share offer to take the company private that Elliott Associates plunked on the table March 2.

Novell wants more money.

Bearing in mind that Novell currently has close to a billion dollars in the bank that Elliott would theoretically get, Novell calls the offer “inadequate” and claims it “undervalues the company’s franchise and growth prospects.”

Those “growth prospects,” however, are dubious and considering that Novell’s stock hasn’t been valued at $5.75 since the summer of 2008 – well, at least not before it was bid up over six bucks in the last two weeks in anticipation of a sweeter offer – the company now has to do something to placate stockholders.

So it said the board “has authorized a thorough review of various alternatives to enhance stockholder value,” including “a return of capital to stockholders through a stock repurchase or cash dividend, strategic partnerships and alliances, joint ventures, a recapitalization and a sale of the company.”

There has been speculation that IBM or SAP or somebody could pick it up or at least parts of it although it’s not clear why they would.

Novell’s not guaranteeing that any agreement or transaction will transpire and says it’s not going to talk about any of the alternatives “unless and until the board has approved a specific course of action.”

Elliott, which is already supposed to be Novell’s biggest stockholder with 8.5% of the shares, has yet to be heard from.

The Blue Harbour Group, a private equity investment group that reportedly owns 4% of Novell, issued a statement backing the board’s decision.

“We agree with Novell’s management and board of directors that the company’s value significantly exceeds Elliott’s proposal,” it said. “Blue Harbour has been in active and constructive discussions with Novell’s management in recent months on various alternatives to create and unlock value and we support the company’s decision today to pursue a formal review process with the assistance of its advisors.”

It apparently sizes up Novell the way Elliott does. When Elliott made its offer, it said that Novell “has meaningfully underperformed all relevant indices and peers.”

After running up to $6.15 because of Elliott’s bid, Novell’s stock closed at $5.64 Friday and could take a hit Monday.

Novell rejected the offer the day before its annual user conference, Brainshare, opens and perhaps a week before a Utah federal jury decides whether it owns Unix or whether it owes SCO damages, a multimillion-dollar verdict that could impact its cash reserves and the value of any deal.

Novell has been struggling to reinvent itself for years and ironically without Microsoft probably wouldn’t be much of a Linux representative. It’s been suffering six straight quarters of declining sales and isn’t predicting much of a change going forward.

It’s being advised by JP Morgan.