Sun Micro cuts its price to seal IBM deal

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Sun is about to go down.

According to various reports, Sun Microsystems (JAVA) is so eager to get IBM to buy the company that it's willing to lower its sale price for a stronger commitment. The deal could come as early as Friday.

Sun cut its takeover price to between $9 and $10 a share, down from the previously discussed $10 to $11, according to The Wall Street Journal.

The lower price is a concession by Sun, upon the condition that IBM commits to finishing the acquisition no matter what the government's antitrust review finds, the Journal said. Sun wants to limit IBM's exit strategy in case regulators stymie the deal for months or impose harsh conditions.

Talks between the two companies continue and the deal could be announced Friday, according to The New York Times'DealBook blog, which reports that $9.50 a share will get it done. The timing is not certain and neither company has commented on reports that the technology companies are in merger talks.

All Things Digital's Digital Daily blog says the purchase would top the $5 billion IBM paid for software make Cognos in November 2007. Sun, valued at about $6 billion, would be the most spent by IBM on a deal.

According to Bloomberg, IBM CEO Sam Palmisano said he planned "to go on offense" during the recession and make acquisitions. The merger would give IBM almost half the server-computer market. Sun makes about half its revenue from servers, which run corporate networks and web sites.

The computer server maker, which created the Java programming language, saw its shares leap 79 percent on March 18, the day the deal was first reported. Shares closed at $8.21 today. IBM shares closed at $100.82.

Sun is based in Santa Clara, California. IBM is based in Armonk, New York.

Anthony Massucci is a senior writer for Daily Finance. He previously covered technology companies for Bloomberg News.
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