The reason that AT&T Co and Sun Microsystems Inc were unable to announce AT&T’s plans to invest in the Mountain View, California company at the time – on Black Monday, October 19 – that they announced their technology collaboration, was that they hadn’t then hammered out the complex terms that were released on Wednesday (CI No 840): Sun was determined that AT&T should not invest in it on the cheap, and the agreement finally reached is that whenever Sun comes to AT&T for cash over the next three years, AT&T will pay a 25% premium to the average of the closing price of Sun’s shares over the previous 20 trading days; there is also a provision that if another investor buys between 20% and 40% of Sun, AT&T may buy the same amount to remain the largest shareholder; Eastman Kodak Co took a 7% stake in Sun some three years ago, since reduced to 4.5% after further share issues.
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