IBM’s bid to acquire Sun Microsystems appeared on the brink of collapse Sunday, as the boards of the two companies jousted over price and terms. It’s not clear whether the deal is genuinely on its deadbed or the two companies are negotiating through media leaks.
The New York Times reported that IBM has withdrawn its $7 billion offer Sun’s board balked at a reduced deal price of $9.40 per share. The Wall Street Journal reports similar details, saying IBM withdrew its bid after Sun terminated an agreement to negotiate exclusively with IBM. But the Journal said a deal remained possible.
“Late-stage deal negotiations are often full of brinkmanship, and it’s possible the two sides are hardening their positions only to strike a full deal in the near future,” writes the Journal (subscription), which said one source “suggested the situation was ‘fluid’ and the parties were still in touch by phone.”
Analysts seem to agree that Sun has more at stake, and might see its share price drop sharply if the deal collapses. Sun shares were trading in the $5 range when IBM’s interest became public, well below the reported $9.40 a share price of IBM’s latest bid.