IBM has withdrawn its $7 billion takeover offer for Sun Microsystems after the Sun board balked at a reduced offer.
According to the New York Times, IBM shaved its offer Saturday from $9.55 a share to $9.40 a share after issues rose in due-diligence. The Sun board did not reject the offer, but wanted certain guarantees that IBM considered onerous. Sun is also said to have told IBM that it would no longer abide by its exclusive negotiating agreement, forcing IBM’s hand.
Sun (NASDAQ:JAVA) stocks closed at $8.49 Friday, up from a 52 week low of $2.60. The stock traded at $4.97 prior to the takeover offered being disclosed, and may well return to similar levels when trading opens in New York on Monday.