Step closer to merger?
Published: 23 March 2009 08:53 GMT
IBM is reportedly wading through Sun Microsystems' contracts and documents for potential conflicts or problems, as it works its way through the due diligence process towards a merger.
According to the Friday report in The Wall Street Journal, IBM's attorneys have been examining Sun's documents for at least the past several days, if not longer.
And while the due diligence process is not anticipated to lead to any nixing of a deal, IBM is seeking a clear understanding of where Sun stands with its complex cross-licensing agreements and other contracts, according to sources cited by the Journal.
In addition to Sun's contracts, IBM may also be taking a peek at Sun's fiscal third-quarter data, given the company will be closing its quarterly financial books at the end of the month.
When Sun reported its fiscal second-quarter results in January, it posted an 11 per cent year-over-year drop in revenue. But on a sequential basis, its financial performance was less severe.
As the parties work towards a merger, IBM is reportedly considering a buyout price of $6.5bn to $8bn, according to the Journal.
Original article: Report: IBM combs through Sun contracts from CNET News.com
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