Feeds

Sun begs IBM to come back and talk

Why can't you commit?

Beginner's guide to SSL certificates

Updated If IBM would only commit a little more to the deal, Sun is keen to resume takeover talks again, according to Bloomberg.

It is citing two people close to the talks, which ended on April 5th. At that point IBM withdrew an offer for Sun valued at around $6.85bn or aproximately $9.40 per Sun share, after Sun terminated exclusive negotiations with IBM.

According to variously reported comments from undisclosed sources, a characteristic feature of these never-formally-admitted IBM-Sun talks, Sun wanted a much firmer commitment from IBM to complete the takeover in the face of potential anti-trust objections. A combined IBM-Sun business would dominate the server market with a near 50 per cent share, slightly more if just Unix servers are considered, and this might set anti-trust alarm bells ringing.

When Sun didn't get this assurance from IBM it walked away. If Sun indeed wanted firmer guarantees from IBM that it would pursue the deal, it indicates that Sun has nowhere else to go, both Cisco and HP having ruled themselves out of any Sun takeover deal.

However, by this afternoon, CNBC was reporting that IBM was no longer interested in a deal, precisely because of the scrutiny it would likely attract.

Other reports said IBM objected to termination pay arrangements for Sun founder and chairman Scott McNealy and CEO Jonathan Schwartz'. These were said to be worth three times more than their annual pay, or a cool $3m for the pony tailed one.

It was also reported that a Schwartz faction was in favour of the tabled IBM deal while a McNealy one wasn't. Schwartz did vote with the rest of Sun's board to walk away, however. Another report said Sun couldn't provide a satisfactory valuation of its software assets to IBM, and yet another one said recent active investor in Sun, Southeastern Asset Management, would lose money on its investment at IBM's supposed offer price.

This all looks like we're having to work out the shape of an elephant from leaked microscopic views of bits of it. Now we have what may be another careful leak saying Sun would be happy to talk some more, if IBM would just make a stronger commitment to finishing the deal. If true, that would indicate Sun's board is now willing to accept a lower offer price and confirm Sun is in a bind with only one exit, the big blue one. Are we looking at $6bn or even less now?

As ever, both IBM and Sun refused to comment. Sun shares peaked at $8.89 when speculation on the talks was at its height on March 18th, up from a low point of $3.51 in January. They are now trading at $6.13, giving it a market capitalisation of $4.57bn. ®

The next step in data security

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Murdoch to Europe: Inflict MORE PAIN on Google, please
'Platform for piracy' must be punished, or it'll kill us in FIVE YEARS
Bono: Apple will sort out monetising music where the labels failed
Remastered so hard it would be difficult or impossible to master it again
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.