Subba’s Serendipitous moments

April 6, 2009

IBM — Sun deal fails?

Filed under: Business,Competition,Model — Subbaraman Iyer @ 11:35 am
Tags: , , , , , , , , ,

IBM withdrew its $7 billion offer for Sun reports the NY Times which reports that Sun believed the offer was too low and the offer was rejected by the Sun Board. The Wall Street however is not so categorical about the rejection and believes the deal will go through.

I wrote earlier that IBM doesn’t need Sun. It is Sun that needs IBM. Sun has been in the market for a long time courting probable suitors.

The failure of the deal will hurt Sun more than anyone. Customers will be wary of purchasing Sun gear. Moreover the management will be questioned about their commitment to a go-it-alone strategy. Hence Sun may accept the lower price offered by IBM. Sun doesn’t have much choices left.

My assessment is that Sun’s problems may actually worsen after the failure of the talks. IBM comes out unscathed.

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2 Comments »

  1. Will that turn out to be like the failed MS bid of Yahoo?
    I think besides ‘right value’, ‘timing’ is really key for any such big bid evaluation. Only problem is there is no way to pin point the ‘right time’.

    Comment by Krishna Baidya — April 6, 2009 @ 11:59 am | Reply

  2. That is to bad for Sun. The combination of IBM and Sun would be great for IT.

    Comment by Ted Tucker — April 8, 2009 @ 11:50 pm | Reply


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