Monday, April 6th 2009
Sun Microsystems Rejects IBM Buyout Offer
In March IBM was reported to be in the midst of negotiating to acquire Sun Microsystems. On the time of the publication there was no more to talk about, but on Saturday IBM finally made a formal bid of $9.40 a share for Sun, or a deal that would have been valued at about $7 billion. Unfortunate for IBM, Sun rejected the offer and has terminated IBM's right for exclusive merger talks, making Sun open for other merger candidates. IBM, in return, withdrew its buyout offer. Two reasons stay behind Sun's decision, one being the belief that the bid was too low, and the other being the terms of agreement, which give IBM too much flexibility in walking away from the deal. It is unclear if a second bid will be proposed by IBM, or will the negotiation between the two companies continue. Representatives from both IBM and Sun declined to comment on an unannounced information.
Source:
CNET News
9 Comments on Sun Microsystems Rejects IBM Buyout Offer
Is Sun in trouble or something?
in a few months due the recession they will accept 5....
Sun Microsystems should have accepted the 7 Billion, it wasnt enough for them, but they should have made it enough.
This time last year their company was @ $17 a share, and its been a slow downhill ever since. Eventually they reached their all-time low in November of last year @ $2.60 a share due to the recession and their many other variables, but managed to balance themselves out and iron out issues.
Sun Microsystems managed to raise the share value since November to the $10 area in just a few short months, and i feel that they started to feel over-confident. As soon as they rejected the 7 Billion takeover, in a matter of moments their shares dropped about 35% to $6.56.
I prefer the two companies remain seperate entities.