Report: Sun still open to an IBM bid

But Sun wants IBM to make a 'stronger commitment' to the deal

Sun Microsystems Inc. would be willing to revive acquisition talks with IBM if the latter company "makes a stronger commitment to complete the purchase," according to a Bloomberg News report.

Sun declined to comment Thursday on the report, which cited two unnamed sources familiar with the matter.

Meanwhile, a separate report from CNBC, also citing anonymous sources, said Sun approached IBM a couple of days ago about reopening talks.

But IBM has cooled considerably on the prospect of acquiring Sun, because of the potential for a long and intense review by government regulators concerned about antitrust issues, the report added.

IBM "may not be interested in buying Sun at any price," according to one source cited in the CNBC report. Big Blue has not formally told Sun it has ruled out such a deal, a source also told the network.

IBM shares were up about $1 on the news during early trading, while Sun's rose about 5 cents.

Sun's board of directors declined an offer IBM made on April 4 because the price was too low, according to The New York Times. Sun also believed the proposed deal gave IBM too much leeway to walk away, according to a Wall Street Journal report.

While neither Sun nor IBM has officially confirmed that merger talks are in progress, the companies have reportedly been in discussions since mid-March or earlier, with the drama playing out in a series of leaks to the media.

The possible merger has been valued at about $7 billion. However, CNBC's report said Sun is now "willing to be far more flexible on price and terms."

If it proceeds, the deal would boost IBM's lead over Hewlett-Packard Co. in the server market. IBM took 31.4% of worldwide server revenue in 2008, followed by HP with 29.5%, Dell with 11.6% and Sun with 10.1%, according to figures from IDC.

Copyright © 2009 IDG Communications, Inc.

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