Sun Microsystems Inc shares surged nearly 80 percent on Wall Street on Wednesday after reports IBM was in talks to buy the computer server company.
The Wall Street Journal reported overnight that IBM was seeking to purchase Sun in a cash deal for more than US$6.5 billion, or US$10 to US$11 a share, a premium of more than 100 percent over Sun’s closing price on Tuesday.
Sun shares soared by 78.87 percent in New York on Wednesday to close at US$8.89. IBM lost 1.03 percent to US$91.95.
The Journal, citing people familiar with the matter, said Sun in recent months had approached a number of large technology companies in the hopes of being acquired.
Hewlett-Packard, declined the offer, the newspaper said, and a spokesman for Dell, the world’s third-largest computer server maker, declined to comment.
The Journal said the Sun acquisition would bolster IBM’s position on the Internet, in software and in finance and telecommunications markets.
The newspaper also noted that both IBM and Sun make computer systems for corporate customers that are not reliant on Microsoft’s Windows software.
Several analysts, however, questioned the benefits for IBM of the purchase of Sun, which owns the rights to the Java programming language and MySQL open source database software, but has been running up big losses recently.
Devina Mehra, chief strategist at First Global, said the deal “appears reasonably priced” but “we do not think it is a very good idea for IBM to acquire Sun.
“Sun has been in trouble far too long, with a declining business model, for IBM to get entangled into, specially in these troubled times,” he said.
Goldman Sachs said it had questions about the “short-term and longer-term benefit to IBM from a potential combination.
“While there would undoubtedly be significant cost savings in the hardware divisions of both companies post a potential acquisition, there is also substantial overlap in almost all product lines,” it said.
“It is hard to see what strategic value [Sun] has to IBM, but the larger company is flush with cash, and may not be able to help itself,” analyst Douglas McIntyre wrote at the Web site 247wallst.com.
A purchase of Sun would be the largest in the history of IBM and in line with “Big Blue” chairman Samuel Palmisano’s recent pledge not to sit back but to engage in “strategic acquisitions.”
A deal could potentially run into difficulties with the anti-trust division of the US Department of Justice because of the wide range of products the firms now make.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to