IBM breaks off talks to buy Sun Microsystems - San Jose Mercury News

IBM breaks off talks to buy Sun Microsystems - San Jose Mercury News

By withdrawing its offer to buy Sun Microsystems on Sunday 4th. April 2009, IBM has left the future uncertain for a pioneering but struggling Silicon Valley tech company.
After extensive negotiations, the two tech giants had appeared close to finalizing a deal for about $7 billion at the end of last week. But IBM lowered its offer and then withdrew it Sunday, after Sun balked at the price and terms of the sale, according to a source familiar with the negotiations.
Still, the talks may not be over. Ultimatums are not unusual in the final stages of negotiations. The source who spoke to the Mercury News declined to characterize the deal as dead. The source spoke on condition of anonymity because the companies have not authorized anyone to discuss the negotiations.
Both companies declined to comment Sunday.
While it's not unusual for such talks to run into snags, especially with a deal of this size, the latest developments left Sun in an awkward position as the stock market opens Monday.
Santa Clara-based Sun's stock was trading below $5 until reports of the possible acquisition leaked last month. It climbed sharply since then, closing Friday at $8.49 amid speculation that a deal might be announced as early as Monday. But in a major sticking point, Sun's board wanted assurances that IBM would see the deal through to completion. A sale agreement could draw extensive scrutiny from antitrust regulators, and experts say it's not unusual for the target