IBM is no longer interested in buying smaller rival Sun Microsystems Inc at any price, CNBC reported on Thursday, although many investors appear to believe a deal was still possible.

Citing sources close to Sun, CNBC said the high-end computer maker had approached International Business Machines Corp earlier this week to ask it to return to the negotiating table, indicating that Sun would be flexible about price.

But IBM has decided it is not interested in any further negotiations with Sun, the cable news network reported, citing sources close to IBM. IBM and Sun declined to comment.

IBM had withdrawn a $7 billion offer for Sun earlier this month, after the smaller company rejected the bid of up to $9.40 per share as too low, sources with knowledge of the matter have said.

Shares of Sun were up 4.24 percent at $6.39 after the CNBC report, but lower than before the market opened on Thursday. Sun traded at around $4.97 before talks between the two technology companies were first reported in March.

Avian Securities' head of research, Avi Cohen, said he believed the two sides would talk again.

If the deal made sense a couple weeks ago, it certainly would still make sense today, he said. If there was a willingness, which I think there is, if there was a business case, which I think there is, I think they will start up talks.

CNBC said IBM decided against the move after looking at Sun's structured contracts, as well as change of control clauses that would make an acquisition of the company costly.

It also reported that IBM's contacts within the U.S. Justice Department, U.S. Securities and Exchange Commission and the European Union have all advised the company that such a merger could be subject to an antitrust review lasting six to nine months.

Analysts have said a deal may be crucial for Sun's long-term survival as it has been losing market share in servers to IBM and Hewlett-Packard Co, and analysts expect it to report a third straight quarter of losses excluding special items.

Sun, which rose to prominence in the 1990s, had been searching for a buyer for several months, according to bankers.

The Silicon Valley company never fully recovered from the burst of the dot-com bubble burst in the early 2000s, when demand for servers cratered. It has also failed to fully capitalize on its software assets, including its Java software platform.

IBM shares rose 2.79 percent to $101.61 on the New York Stock Exchange late Thursday afternoon.

(Reporting by Ritsuko Ando, Jim Finkle, and Tiffany Wu; Editing by Derek Caney, Richard Chang)