IBM doesn’t want to buy Sun Microsystems anymore. I think it’s a good move for IBM although it’s really bad for Sun Microsystems. IBM is the best suitor for Sun, considering it’s experience in monetizing on opensource projects. Sun can’t seem to earn much money out of it.
I.B.M. Withdraws $7 Billion Offer for Sun Microsystems
I.B.M. withdrew its $7 billion bid for Sun Microsystems on Sunday, one day after Sun’s board balked at a reduced offer, according to three people close to the talks.
The deal’s collapse after weeks of negotiations raises questions about Sun’s next step, since the I.B.M. offer was far above the value of the Silicon Valley company’s shares when news of the I.B.M. offer first surfaced last month. Sun, an innovative pioneer in computer workstations, servers and Internet-era software, has struggled in recent years and spent months trying to secure a suitor.
With I.B.M. and others shying away from a deal, a bruised Sun could be forced to continue pursuing a solo business model whose prospects have been questioned by many analysts.I.B.M. had a team of more than 100 lawyers conducting due-diligence research on potential problems in a purchase of Sun, ranging from those antitrust concerns to Sun’s contracts with employees and I.B.M. competitors.
After the legal review, I.B.M. shaved its offer Saturday from $9.55 a share, the proposal on the table late last week, to $9.40 a share, said one person familiar with the talks. The offer was presented to Sun’s board on Saturday, and the board balked. The Sun board did not reject the offer outright, but wanted certain guarantees that the I.B.M. side considered “onerous,” according to that person.
Sun then said it would no longer abide by its exclusive negotiating agreement with I.B.M., a second person familiar with the discussions said. On Sunday, I.B.M.’s board decided to withdraw the offer. (Source: New York Times)
I applaud IBM on not purchasing Sun Microsystems. It’s not worth USD7billion at all. Acquiring the company is like charity work.