International Business Machines Corp said Thursday it will cut its bid for Sun Microsystems Inc to an offering price ranging $9 to $10 a share.
According to the reports in The Wall Street Journal, Sun will take the lower bid in exchange for a stronger deal commitment from IBM in the face of antitrust concerns.
Last month, IBM was reportedly offering Sun $10 to $11 a share.
If deals succeed, expect clouds in the forecast. It could fast-track IBM Corp.’s goal of becoming the “General Electric of the cloud computing,” said industry analyst, Charles King of Pund-IT Research Inc.
“These assets can be integrated into IBM’s own cloud efforts fairly easily,” King added. The move might also be a key step in heading toward the platform and infrastructure-as-a-service model that IBM needs to dominate the private cloud market.
Agreed Habeel Gazi, research analyst with Info-Tech Research Group Ltd added, acquiring Sun’s crown-jewel Java programming language would give IBM control of a platform that runs many crucial applications and could actually support IBM’s cloud push.
IBM and Sun deal, which has been rumored US$6.5 billion offered, could be labeled a steal, according to King, considering Sun has about $2 billion in cash and short term assets.
IBM shares rose $3.10 cent to 3.17% at $100.71, while Sun share jump to 7 cent or 0.87% at $8.07 in the early trading.