Report: IBM cuts price on Sun deal

IBM has reportedly cut its purchase price for Sun Microsystems to a range of $9 to $10 a share. And Sun is apparently willing to accept the lower range providing IBM agrees to pursue the deal, even in the face of antitrust scrutiny, according to a report Thursday in The Wall Street Journal.

(Credit: Yahoo Finance)

Previously, IBM was contemplating a buyout price of $10 to $11 a share, according to the Journal. Big Blue had recently been delving into Sun Microsystems' contracts for any possible conflicts, as part of its due diligence on the company.

Sun Microsystems stock spiked 6.25 percent to $8.50 a share on initial reports Thursday that IBM lowered its price and Sun was willing to accept it, but then Sun's shares tempered as more news filtered out that the deal was still under discussions and there was no guarantee it will ultimately go through.

Sun subsequently was up a mere 1.63 percent to $8.13 a share in intra-day trading Thursday.

Prior to reports last month that IBM was interested in buying Sun for approximately $6.5 billion, Sun Microsystems' shares had largely languished below $5 a share for the past five months.

[scdecade]

Thery're going to have to set up a special exhibit in the "Museum of Idiot Businessmen" for the Sun management and board of directors. The BOD especially, what a bunch of sleeping dolts. Years and years and years of under-performance without a change in management. Schwarz took KKR private equity money when he admits they didn't need it in exchange for warrants which allow the bankers to game-trade Sun stock. Thanks a lot, jerks! We've heard grand plan after grand plan come and go with zero accountability for delivery results. Sun's x64 strategy was about 5 years too late. Maybe it wouldn't have mattered but then Sun missed the boat on Intel Quadcore. They stuck with AMD even as the market turned against them. Only after it became obvious to everyone Intel was back in the lead, Sun came up with... a grand announcement (agreement with Intel) and grand plans. Wash, rinse, repeat.

If you look at all the changes Sun's made over the past 8 years with the exception of SPARC, then a down economy should be a huge opportunity for them to regain market share. They reduced the marginal cost of carrier grade software to basically zero. They're really making an impact in storage for the first time ever with low cost, high performance, compromise nothing solutions. They got unique x64 systems for fringe case apps as well as mainstream stuff. They've got the systems, software, services, and support to compete with anyone.

Well, I guess Sun management wouldn't be true to their spots unless they sold out at the very bottom. Maybe this is a sign of optimism for the rest of us. If Sun management thinks things will get much worse, then maybe good news is right around the corner.

[jharrop2]

I'd prefer Apple to buy Sun instead, because then Apple would make Java a first class citizen across its products including the iPhone (and there'd be an alternative to Objective C). (You'd think IBM buying Sun would be anti-competitive in the market for JVMs? Though with open source I guess they'd argue no. Whereas Apple would give us 2 strong vendors...)

This would only be good though if Apple was committed to maintaining the quality of Java on non Apple platforms. So maybe its not such a good idea after all!

[dargon19888]

Apple isn't in the market for Sun.

I agree that the choice would be an interesting one. It would definitely signify that Apple is ready to enter the business marketplace and go after Microsoft.

However, Apple has a few internal problems of their own. Who is Job's heir apparent? Until that issue is solved and Apple's board wants to enter the business marketplace, you won't see any movement.

With respect to a different party entering in to the Java fray, I expected more from Oracle...

[pokiri]

I don't think any deal is going to happen. Sun will regain its past glory ( or more of that ) through open storage, clouds, CMT servers etc. The 22% stake holder in SUN is a vulture.

[z3r0bit]

Apple and Sun complement each other perfectly. No antitrust issue worries with Apple and Sun! Now IBM and Sun merging would sound the monopoly alarm in an instant. I too would rather see Apple and Sun merger, it's a win win they both benefit. Their products synergize. Apple's media market with Sun's storage and server technologies are meant fir each other. Solaris and Mac OS X another winner! WebObjects & Java, xgrid & sun grid engine along with other great Apple & Dun combinations would leave competitors in the dust! Any other company merging with Dun would spell an end to Sun technology especially IBM their products overlap and in order to be profitable large cuts would need to be made, restructuring and just eliminating products will occur. Really sad for Sun. This can be adverted with Apple where they would have great leadership and vision under Jobs and his crew. Let creativity flow merge with Apple Sun!