IBM Puts on the Pressure
March 30 to April 3: Sun and advisers explain to IBM
and its advisers in detail their concerns with the proposal, particularly in regard
to transaction certainty and antitrust matters.
April 3: IBM indicates that it wants to bring the process to a close.
April 4: IBM lawyers deliver to Sun two versions of a merger agreement, saying these documents represent IBM's final offer to acquire Sun and that the offer will expire at 6 p.m. that day. One of the agreements proposes a price per share for Sun common stock of $9.40 in cash and the other proposes a price of $9.10 per share in cash. Each offer has other considerations attached.
The Sun board meets to discuss the IBM offers. The board concludes that the risks of a transaction with IBM on the terms then being proposed are not in the best interests of Sun's stockholders relative to other alternatives available. The board then rejects the IBM offers and terminates its exclusivity agreement with IBM.
April 6: The Sun board meets to discuss Oracle and HP inquiries. Management and advisers recommence discussions with Oracle and HP with regard to a possible transaction. HP resumes its due diligence investigation of Sun on April 9.
April 10: The Sun board decides to contact IBM one more time to explore the possibility of further negotiations. Later that day, Sun and Oracle enter into a confidentiality agreement and Oracle commences its detailed due diligence review of the company.
April 11: Oracle management meets with Schwartz and other Sun managers to discuss a possible transaction.
April 16: Sun and IBM agree to new negotiations, but IBM insists that if it and Sun are not able to reach agreement and announce a transaction by the morning of April 20, IBM will terminate discussions. The two compensation options-for $9.10 per share and $9.40 per share-are still on the table.
April 17: HP informs Sun that it will not be submitting a proposal for an acquisition. Later that day, Oracle indicates that it will be making a proposal at a price per share of $9.50.
April 18: The Sun board discusses terms proposed by Oracle as well as the terms then being proposed by IBM and the status of negotiations with IBM. At this time, IBM has not definitively confirmed the price it was proposing, but it has not indicated any flexibility to negotiate above $9.40 per share since lowering its proposed price on March 29.
April 19: A Sun board member requests that IBM confirm the price it would be willing to pay for Sun's common stock. IBM replies that it is now prepared to pay only $9.10 per share and does not have any further flexibility on price. Later that day, Sun and Oracle sign the Oracle merger agreement for $9.50 per share.
April 20: The media is alerted about the agreement.