IBM’s bid for Sun is in doubt

IBM Corp. withdrew its offer to buy Sun Microsystems Inc. for about $7 billion this weekend, clouding the prospects for a deal that would have shaken up the computing industry, two people familiar with the situation said Sunday.

Talks were in their final stages in recent days, but IBM took its offer off the table after Sun terminated IBM’s status as its exclusive negotiating partner, said the people, who spoke on condition of anonymity because they were not authorized to disclose the talks. One of these people said the two sides were still meeting Sunday.

Armonk, N.Y.-based IBM was believed to be offering about $9.50 a share for Sun. That was about double the price the Santa Clara, Calif., server and software maker was trading for when the discussions leaked last month. Sun shares closed Friday at $8.49.

Sun was one of the darlings of the dot-com era but spent most of this decade struggling to find its place, wrestling with huge losses and layoffs. As a result, many analysts were not surprised Sun and IBM were in talks.

The purchase would give IBM almost half of global server-computer sales and Sun’s software portfolio, including the Solaris operating system.