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Technology Stocks : All About Sun Microsystems

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To: Charles Tutt who wrote (64777)4/2/2009 2:34:21 PM
From: Mark O. Halverson  Read Replies (1) of 64865
 
WSJ article

IBM Lowers Takeover Bid for Sun Article
By MATTHEW KARNITSCHNIG and HEIDI N. MOORE

International Business Machines Corp. has cut its intended takeover price for Sun Microsystems Inc. to between $9 and $10 a share, according to people familiar with the matter.

Sun has agreed to accept a lower price in return for stronger commitments from IBM that it will complete the deal even if it faces intense regulatory scrutiny, the people added.

The two sides continue to negotiate the precise terms of those assurances, however, and it remains unclear when the two sides will reach a deal, the people said. The companies were previously discussing a price in the $10- to $11-a-share range.

Sun is concerned regulators could hold up a deal for months and impose conditions on its completion as part of the government's antitrust review. Should that occur, Sun's board wants to limit IBM's ability to exit the deal.

Sun shares were trading at $8.15, up 15 cents, in afternoon trading on the Nasdaq Stock Market. The company currently has a market value of about $6 billion.

Sun is concerned regulators could hold up a deal for months and impose conditions on its completion as part of the government's antitrust review. Should that occur, Sun's board wants to limit IBM's ability to exit the deal.

Legal experts said any deal stands to face close antitrust scrutiny, especially in the market for server computers sold to big corporations and governments around the world.

After a deal, the combined companies would account for 42% of total server market revenue--65% of the market for servers based on the Unix operating system. The companies will also account for nearly half of all revenue from tape-storage systems.

A Sun spokeswoman declined to comment. A request for comment from IBM wasn't immediately returned.
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