Sun Microsystems shares are up 65 percent this morning after the WSJ reported IBM is considering a $6.5 billion cash bid for the company, a nearly 100 percent premium to its Tuesday close. Sun had reportedly been shopping itself to larger rivals for some time.
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Reuters' Eric Auchard says Sun's high-end focus finally paid off:
Sun Microsystems Inc, the darling of the dot-com boom, never really recovered from the bet it made on high-powered computers used to run the first generation of Internet datacentres.
But it's those same high-performance machines, favored by many telecom operators and financial services companies to handle high-transaction volumes in their switchboards or trading exchanges, that may prove to be its saving grace.
He calls Sun's high-end SPARC computer line the "key attraction" for IBM as it deals with Cisco's strong entry into the server market. The technological fit between IBM and Sun makes sense, even if their cultures (Silicon Valley volatile vs. staid and storied Armonk, NY) and balance sheets (Sun lost $209 million in the December quarter) might be difficult to mesh.
Kara Swisher, who called this deal a few weeks ago, says more big tech deals could be on the way, including a possible paring between Google and Twitter.
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