Reports are widespread this morning that IBM's offer of US$9.55 per share for Sun Microsystems has been rejected by Sun's board, and that IBM has pulled it offer off the table. Sun's stock plummeted on the news, down to around $6 per share. It had been stagnant at around $4 per share before IBM's offer, and rose to $8.48 per share on Friday. The Wall Street Journal has the story about the $7 billion deal, which apparently is favored by CEO Jonathan Schwartz but opposed by chairman Scott McNealy.
Apparently, talks continue, but WSJ characterized them as confrontational—not surprising, given the companies' long history of dispute over Java licensing, NetBeans vs. Eclipse, the direction of the Java platform, and more. The paper also reports that there are no other apparent suitors for Sun, so this is IBM's deal. Meanwhile, Sun's board will have to answer to its shareholders if the deal falls through, considering IBM's offer was for more than double what the stock was trading at. So the intrigue and gamesmanship will continue. Both companies stand to gain with the deal, but only Sun would lose if it doesn't happen.