Sun Microsystems has rejected IBM's offer to acquire it for US$7 billion, a move that took the tech industry by surprise and sent Sun stock plummeting.
Speculation is rampant as to why Sun Microsystems spurned the offer -- a move critics view as downright foolish in this economy -- as well as what the two companies may do next, and who else might have pockets deep enough to take IBM's place at the negotiating table.
The rejection also prompted comparisons to the Microhoo fiasco last summer, when Microsoft attempted to buy Yahoo and was rejected. Yahoo, of course, has survived -- but the company was clearly battered by fallout following its rejection of the Microsoft bid.
Sun's rejection could trigger additional flashbacks to the Microsoft-Yahoo drama, said Vanessa Alvarez, information, communications and technologies analyst with Frost & Sullivan , with a hostile bid mounted by someone playing the role of Carl Icahn in the Microhoo saga.
IBM, of course, had its reasons for making the offer -- and there is no certainty that it will walk away now that it has been spurned.
For IBM, the acquisition was about buying market share and aggressively competing against HP , whose acquisition of EDS was a direct jab at IBM's services business, Alvarez continued.
It was also, to some extent, a jab at Cisco , which recently entered the server business and competes with IBM in the unified communications and collaboration space as well, she pointed out.
Source : ECT News Network
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