IBM has withdrawn its $7 billion bid for Sun Microsystems, after Sun's board of directors rejected the offer as being too low.
The IBM offer was much higher in value than Sun's shares when news of the IBM offer first surfaced last month--11 percent higher than Sun's stock price on April 3, according to Bloomberg. Sun, a provider of computer workstations and internet software, has struggled in the marketplace in recent years, reported the New York Times ( NY Times).
IBM had a team of more than 100 lawyers conducting due-diligence research on potential issues in a purchase of Sun, ranging from antitrust concerns to Sun's contracts with employees and IBM competitors.
After the legal review, IBM shaved its offer Saturday from $9.55 a share, the offer on the table late last week, to $9.40 a share, one insider told the NY Times. The offer was presented to Sun's board on Saturday. The Sun board did not reject the offer outright, but wanted certain guarantees that the IBM side considered "onerous," according to one source.
Sun said it would no longer abide by its exclusive negotiating agreement with IBM, a second source told the NY Times. On Sunday, IBM's board decided to withdraw the offer.
The breakdown in the talks, according to the second source, came over the shifting balance of price and conditions for the deal.