When it comes to the rumored IBM acquisition of Sun Microsystems, all that remains is for the ink on the legalese to dry. That's what several eWEEK sources are telling us. The report was that IT infrastructure company IBM would acquire Sun for approximately $6.5 billion. It's a large number, but it is specific, and that is a key indicator of authenticity.All the indicators point one way: The acquisition of one of the most innovative,
risk-taking and open-source-minded IT companies in the world, Sun Microsystems,
by the world's oldest and arguably largest IT corporation, IBM,
is a done deal.
All that remains is for the ink on the legalese to dry. That's what several
eWEEK sources are telling us.
Click
here to read more about what acquisition by IBM could mean for Sun
Microsystems.
"With the level of detail that came out [March 18], that pretty much makes
it a done deal," Brian Babineau, an analyst with Enterprise Strategy Group
and one of those sources, told eWEEK.
The report was that IBM would acquire Sun
for something in the neighborhood of $6.5 billion. It's a large number, but it
is specific.
"For example, when HP [Hewlett-Packard] bought Mercury Interactive [for
$4.5 billion] in 2006 and when it bought
EDS [for $13 billion] last year, those stories had numbers on them, and
they were done deals by the time that came out," Babineau said. "This
deal is probably 95 percent done. It's just a matter of getting all the legal
paperwork signed and delivered."
It had better be done. Because if it's not, then Sun's looking at a pretty
miserable time over the next 12 months.
Why? Because shareholders have a good idea of what the company is now worth on
the open market. Also, based on the reports, the stock price zoomed up almost
80 percent on March 18 to about $9 per share. Today, March 19, the stock was
down a tad, so there was profit-taking going on, as is to be expected.
If the deal does not happen, then Sun and all its brassespecially CEO
Jonathan Schwartzwill be on the firing line for a long while, trying to
explain why it fell through. They do not want that to happen.
Remember what happened to Yahoo
in the 2008 failed attempted takeover by Microsoft? Co-founder and CEO
Jerry Yang, who's personally popular among most Yahoo employees, had to endure
a lot of sleepless nights trying to save face after that debacle.
Now he's not the CEO
anymore.
Another factor in all of this: IBM is motivated to get this done as quickly as possible
so that no other bidder (Cisco Systems, Intel, HP?) will come into the picture.
Because Sun has been losing boatloads of money for most of this decade, it
would also behoove all concerned to have the company stop filing quarterly
reports as soon as practicable.
So where does this leave us? Deep industry sources contacted by eWEEK all
indicate that this deal could be announced as soon as March 20, or by early the
week of March 23 at the latest. All depends on how fast the lawyers get their
work done.
There is one more factor, though: Lawyers get paid by the hour.