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April 16, 2009

Sun to talk again with IBM, Cisco ruled out: reports

Speculation builds on the future of Sun

By CBR Staff Writer

Talk continues about the possibility of Sun Microsystems Inc resuming its discussions with IBM Corp about a possible takeover, but Cisco Systems Inc chief John Chambers has ruled out using any of the company’s $34 billion cash reserves in a bid for the ailing server and software house.

“Cisco moves very rapidly on acquisitions,” Chambers is reported by Bloomberg as saying at a briefing in Seoul, Korea when asked about Sun. “If we were going to be in an area, we would probably have already moved.”

The news service also reported today that Sun was ready to resume IBM takeover talks.

Ten days ago negotiations broke after the two companies supposedly failed to agree on a price and other terms of a proposed acquisition. 

IBM supposedly would go no higher than $7 billion, which Sun saw as under-valuing a business with $2.7 billion reserves in cash and short-term investments.

In an indication of what the market is planning should Sun fail to find a buyer, Dell today launched a marketing offensive against the company with a campaign to offer Sun customers “an immediate path from legacy data centres to more open, flexible standards-based technology.”

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Steve Schuckenbrock, president of Dell’s Large Enterprise Group said in a statement, “Sun customers now more than ever are demanding paths from inefficient and proprietary legacy data centres, to simpler x86-based IT solutions.”

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