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.
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
Taiwan was ranked the fourth-safest country in the world with a score of 82.9, trailing only Andorra, the United Arab Emirates and Qatar in Numbeo’s Safety Index by Country report. Taiwan’s score improved by 0.1 points compared with last year’s mid-year report, which had Taiwan fourth with a score of 82.8. However, both scores were lower than in last year’s first review, when Taiwan scored 83.3, and are a long way from when Taiwan was named the second-safest country in the world in 2021, scoring 84.8. Taiwan ranked higher than Singapore in ninth with a score of 77.4 and Japan in 10th with
China's military today said it began joint army, navy and rocket force exercises around Taiwan to "serve as a stern warning and powerful deterrent against Taiwanese independence," calling President William Lai (賴清德) a "parasite." The exercises come after Lai called Beijing a "foreign hostile force" last month. More than 10 Chinese military ships approached close to Taiwan's 24 nautical mile (44.4km) contiguous zone this morning and Taiwan sent its own warships to respond, two senior Taiwanese officials said. Taiwan has not yet detected any live fire by the Chinese military so far, one of the officials said. The drills took place after US Secretary