Sun Micro rejects IBM's $9.40 a share takeover offer

06 April 2009

Talks between computer giant IBM Corporation and server maker Sun Microsystems Inc have broken after Sun rejected IBM's offer of $9.40 or below a share, sources close to the development said.

While talks between the two ended, reports said, the board of Sun Microsystems is split over the deal. ''CEO Jonathan Schwartz wants the IBM deal, chairman and Sun founder Scott McNealy doesn't,'' the Wall Street Journal reported quoting sources.

While Sun, with its hardware roots, struggle to find business, it would have to explain the failure of the buy-out talks to its customers and shareholders.

IBM is also reported to have lowered its offer price for Sun by 50 cents from the earlier offer of $9.50/9.55 a share.

There were, however, no comments from both IBM and Sun Micro over the failure of talks. It is also unclear if the two would resume talks.

Shares of Sun Microsystems had vaulted to $8.49 on Friday from $4.97 on 17 March, a day before reports of talks between the two technology companies emerged. IBM shares have also been rising since the start of the negotiations.