Intriguing rumour
Just a quickie to start off the day. The Wall Street Journal has cited its usual ‘people familiar with the matter' as the source of its announcement that IBM is in talks to acquire server maker Sun Microsystems.
These same sources stressed the talks are not concluded and the deal could still not happen. Neither IBM nor Sun would speak to the WSJ. It was also suggested in the article that Sun has been offering itself to other buyers in the past few months, but HP at least declined.
One recent event that may have made Sun seem more tempting to IBM is the revelation that Cisco has joined the server market. IBM has been attempting to reinvent itself as a services company in recent years but it seems inevitable that it will always have to offer some kit. This deal would help IBM in that area as well instantly strengthening it in a variety of markets.
Sun's share price dropped over four percent in after hours trading and currently it has a market cap of $3.29 billion. IBM's shares are pretty much unchanged so far, but the WSJ story only broke minutes ago. IBM's market cap is $124.66 billion.
UPDATE: 13:00 18/3/09
The above statement about Sun's share price was incorrect. At time of writing this update Sun's shares were up a massive 68 percent in pre-market trading and its market cap was $3.7 billion based on yesterday's closing share price of $4.97.
