No Deal: IBM Pull Out of Sun Buyout
In direct contrast to the rumours that were going around last week, news is now breaking that the IBM buyout of Sun has fallen through. The New York Times has reported that the breakdown was a result of shifting balance of price and conditions for the deal.
After the legal review, I.B.M. shaved its offer Saturday from $9.55 a share, the proposal on the table late last week, to $9.40 a share, said one person familiar with the talks. The offer was presented to Sun’s board on Saturday, and the board balked. The Sun board did not reject the offer outright, but wanted certain guarantees that the I.B.M. side considered “onerous,” according to that person.
Sun then said it would no longer abide by its exclusive negotiating agreement with I.B.M., a second person familiar with the discussions said. On Sunday, I.B.M.’s board decided to withdraw the offer
What now for Sun? IBM never needed this deal as much as Sun did. But I don't think Sun are in an impossible position. Given the amount of concern shown by developers at an IBM buyout, perhaps they are more confident of their place in the industry now. It will be very interesting to see Sun's next step.