IBM pulls Sun offer

Technology giant IBM withdrew its offer to buy Sun Microsystems for about $7bn (€5.16bn) this weekend, clouding the prospects for a deal that would have shaken up the computing industry.

Talks were in their final stages in recent days, but IBM took its offer off the table this weekend after Sun terminated IBM’s status as its exclusive negotiating partner, according to two people familiar with the situation.

One of these people said the two sides were still meeting.

The breakdown in the negotiations was first reported by The Wall Street Journal.

IBM, based in Armonk, New York, was believed to be offering about €7.20 per share for Sun. That was about double the price the Santa Clara, California-based server and software maker was trading for when the discussions leaked last month. Sun shares closed on Friday at €6.40.

Sun was one of the darlings of the dot-com era but spent most of this decade struggling to find its place, wrestling with huge losses and thousands of layoffs. As a result many analysts were not surprised Sun and IBM were in talks.

Sun still owns key server and business-software technologies that might have fit in IBM’s product and services line-up. But a deal would probably face anti-monopoly questions and Sun has been pushing IBM to make certain commitments to seeing the deal through such scrutiny.