Share
Despite appearing to be on the verge of putting pen to paper in a high-profile acquisition believed to be worth some $7 billion USD, the bottom has inexplicably dropped out of a seemingly cast-iron deal between International Business Machines (IBM) and Sun Microsystems. While confirmed reasoning has yet to be established, shares of Sun fell in pre-market trading on Monday morning following news that IBM had opted to withdraw its takeover bid during the course of the weekend.
IBM and Sun descend into punch and counter punch as takeover deal hits the skids. Image: cheetah100/Flickr.
With IBM evidently closing the book on the deal, Sun proceeded to add its own full stop by cancelling IBM’s status as its exclusive negotiating partner, according to an Associated Press report.
Citing people closely positioned with both parties, AP’s report claims IBM and Sun had been wrangling over price, with Sun maintaining that IBM’s offer of $9.40 USD per share was below the company’s true worth.
Interestingly, the $7 billion USD tabled by IBM was the equivalent of 11 percent more than Sun’s share value on April 03.
It has also been suggested that Sun was insistent that IBM fully commit to the deal during a process of regulatory inspection that could involve antitrust scrutiny.
Ahead of Monday morning trading, shares of server maker Sun Microsystems, also known for software such as Java and Open Office, had dropped by some 26 percent, moving value from $8.49 USD per share to $6.30 USD per share.
It remains unclear whether the two industry heavyweights will return to the table or the deal is officially dead in the water. Had IBM completed its acquisition of Sun, it would have been the technology giant’s biggest ever purchase.
Want regular updates from The Tech Herald? Follow us on Twitter.
The Tech Herald: Sun Microsystems targeted in IBM acquisition?
The Tech Herald: 1500 jobs lost as Sun Microsystems continues restructuring
Interested in a more interactive TTH? Join our Facebook Group Want regular updates from The Tech Herald? Follow us on Twitter
Advertising
Comment on this Story