Sun sets for IBM bid

April 6, 2009

USA/If the Sun-IBM deal is truly dead, and Sun’s reported abandonment of talks is not brinkmanship, then the maker of Java multimedia software could end up with all the kick and excitement of yesterday’s decaf. Among the reasons cited by Sun for walking away, according to The Wall Street Journal, was IBM’s failure to guarantee it would go through with a deal in the face of regulatory challenges. With the mauling courtroom battles that have bloodied the M&A landscape of the last couple of years, it’s not hard to see why Sun would push for such protection.

But if it turns out Sun also played hard to get over price, which seems more likely, Sun may find itself in Yahooland before too long, with a share price in the tank and alternative deals drawing the kind of regulatory scrutiny that Sun says it is trying to guard against.

Sun was said to be unhappy with IBM’s offer of $9.40 per share, which was a premium of up to 89 percent on Sun’s shares before deal talks were first reported last month. Deals getting done these days are far less juicy, and as Peter Falvey, technology banker at Revolution Partners, tells us, Sun is coming out of this looking a lot less sexy than it might have. “Sun is now sort of damaged goods,” he said. “If IBM got under the covers and didn’t like what they saw, then what does that mean for other potential buyers?”

Deals of the Day:

* NTT DoCoMo, Japan’s biggest mobile phone operator, said it would buy an unlisted direct marketing company for 31 billion yen ($308 million) to beef up its wireless e-commerce business.

* MGM Mirage has hired Morgan Stanley to advise on selling a number of its casinos, and is talking to potential buyers about the assets, a source familiar with the situation said on Sunday.

* British pork supplier Cranswick said it agreed to buy the pig-rearing business of Bowes of Norfolk from the Bowes family for 17.2 million pounds ($25.52 million) in cash.

* India Piramal Healthcare chairman said he was not in merger talks with any firm, including Sanofi-Aventis, after a paper reported the French firm’s plans to buy Piramal had failed.

* Infratil advises that it has sold its interests in Fullers Ferries to Souter Holdings with a settlement date of 8 April 2009.

* British hardware retailer Robert Dyas said it was close to completing a management buyout (MBO) to secure the future of its 99-store business that employs 1,250.

* Orascom Telecom must sell its stake in Mobinil to France Telecom by April 10, the French telecoms group said.

(PHOTO: The skyline of downtown is pictured at sunset in Los Angeles March 3, 2009.  REUTERS/Mario Anzuoni)

3 comments so far | RSS Comments RSS

I agree Sun is now, much like Yahoo, damaged goods, but I believe both Sun and Yahoo will pull through and recover.


Oh, and here is a handy link for those wondering what Sun’s stock price looks like now: erview?symbol=JAVA.O


IBM would save big on operating expenses
Sun would get their deep debt paid off & the best shareholder value around.

Sun exec’s want their comp secured.
& IBM plays hardball.

both want each other……

Sun will have to make an announcement next week….and they know they’re dead
if they come with nothing.

4.00 a share…..

what a shame.

good luck

Posted by bob | Report as abusive

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