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IBM/Sun deal hits the rocks

by Scott Bicheno on 6 April 2009, 10:32

Tags: IBM (NYSE:IBM), Sun Microsystems

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Walking away

In the middle of last month the Wall Street Journal reported that IBM was in negotiations to buy Sun Microsystems according to its sources, but neither company verified the rumour.

Yesterday the WSJ's great rival, The New York Times, cited three of its own sources in reporting that IBM has now pulled out of negotiations with Sun, having failed to come to an agreement over price.

It looks like IBM uncovered some potential complications in a purchase of Sun while conducting its due diligence and lowered the price it was prepared to pay for Sun from $9.55 per share to $9.40. One thing led to another and eventually IBM decided to withdraw its offer, according to the NYT.

It's not clear whether IBM is just playing hard-ball or if it has genuinely walked away, but all the investors who bought Sun shares at around $8, after they jumped from $5 following the WSJ story, will be feeling pretty exposed right now. Sun's shares are currently down 25 percent in pre-market trading.

 



HEXUS Forums :: 9 Comments

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Do we know what the “potential complications” might be?
Not enough money…. ?

Cisco coming in to the server market?

Could be a number of reasons they walked…
I assume this has been in the new for some time, I just hadn't noticed it until yesterday when it was in the Scotland On Sunday business section.

:embarrassed:
DR
Not enough money…. ?

Cisco coming in to the server market?

Could be a number of reasons they walked…

Ahh… Thought there might be a suggestion that they had found something moody under the surface, when they were having a closer look at books & forecasts etc.
hermano pequeño;1671174
Ahh… Thought there might be a suggestion that they had found something moody under the surface, when they were having a closer look at books & forecasts etc.

Could well be….. not sure if you have knowledge of anything which Sun might have done wrong?