Report: IBM eyeing Sun buyout at $9.55 a share

After weeks of negotiations, IBM reportedly is eyeing a $9.55-per-share buyout for Sun Microsystems, according to a report in The Wall Street Journal.

Such a price would value the deal at roughly $7 billion and offer Sun investors nearly double the price of the stock before reports surfaced earlier this month that the parties are in buyout talks.

A report in The New York Times, meanwhile, notes the parties are discussing a purchase price of $9.50 a share.

In either case, Sun's investors haven't seen the hardware maker's stock trade at those levels since August. Last spring, Sun was trading at a 52-week high of $16.37 a share.

Sun (blue line) has consistently underperformed the Dow Jones (red) and Nasdaq (green) over the past 52 weeks.

(Credit: Yahoo Finance)

The Journal notes that while the deal talks have progressed toward their final stages, there is no guarantee the deal will ultimately go through.

Sun reportedly is asking IBM to assure the company that it will vigorously pursue the merger despite any regulatory scrutiny, in exchange for Sun agreeing to a lower buyout price than the parties initially discussed.

Sun was up 1.34 percent to $8.32 a share in early morning trading, despite the broader markets edging downward.

[pokiri]

It appears one - third of Sun employees will laid off if this deal goes through. UNbelievable, Sun has come to this pathetic state. The state of employees is that "do your hard work on a sinking ship". The managers need not put any extra positive spin to retain employees. Where to go , otherwise ? Even attorneys are applying for dog shelter job, in this economy.

[Renegade Knight]

Sun has a bright future. It's sad that people judge a company by the stock price. I once had a professional stock trader reccomend the book "The Hysteria of the Masses" (memory us fuzzy but the name was close tot that) as the best guide to stock price.

At 9.55 IBM can go suck eggs. I'd rather take my chances. The up end is a lot better with a Stand Alone Sun than an assimilated one. I'll vote no.

[virtman]

Bright future? Sun and brightness are mutually exclusive (pun intended). They couldn't get their act together in the last 8+ years, why do you believe they will do better going forward? I think it's time to sell the company or sell the company part by part and return the cash to shareholders.

[z3r0bit]

Sun will be fine if they were bought out by Apple. Shareholders should propose this idea So many products that Apple offers complement Sun's and vice-versa. Apple would bring life back into Sun. Sun can be Apple Enterprise and target Apple's creative professionals and expand beyond their current market by working with Apple to make Enterprise software easier to use and cohesive.