Report: IBM Lowers Its Offer For Sun

The Wall Street Journal

IBM is looking to pay between $9 and $10 per share for Sun, down from the $10 to $11 per share that the company was originally discussing, according to the report.

Sun has agreed to the lower offer in return for assurances from IBM that IBM will complete the deal even in the face of intense regulatory scrutiny, the Journal reported, quoting unnamed sources familiar with the deal.

Because Sun expects detailed government antitrust scrutiny that could last for months for such a deal, it wants to "limit IBM's ability to exit the deal," the Journal said.

Sun's share prices rose 2 percent on Thursday to reach $8.16 per share at the end of the trading day. IBM's shares rose 3 percent to $100.59 per share.

Rob Wolfe, president and CEO of AvcomEast, a Vienna, Va.-based solution provider and Sun partner, said that, while he expects the deal to happen, he is not sure what exactly to expect.

"I'd like to look in my crystal ball and know what IBM and Sun will look like in a year from now," Wolfe said. "But I can't, so we need to stay focused on our business."

Such an acquisition would be exciting for Sun's channel partners, Wolfe said.

"IBM has shown how to monetize certain parts of Sun better than Sun has done," he said. "Just look at Java."

IBM also has traditionally done a better job of marketing its products and its brand name than Sun has done, which would be another plus for the channel, Wolfe said.

A combination of the two vendors would be a powerful message to take to customers, he said. "We have customers that work with both Sun and IBM, and some that are Sun-only," he said. "So that would mean a lot of opportunities for us. We're looking for the best way to serve our customers going forward."

IBM and Sun spokespeople said that their companies declined to comment.

Rick Whiting contributed to this story.