Sun Microsystems reportedly rejected IBM's formal buyout offer on Saturday, citing the bid was insufficient and putting future deal talks at risk, according to a report Sunday in The Wall Street Journal.
IBM reportedly made a formal bid of $9.40 a share, or less, for Sun, which in turn rejected the offer and terminated Big Blue's right to exclusive merger talks, the Journal reported. IBM, in turn, withdrew its buyout offer.
In addition to holding a belief that the bid was too low, Sun apparently was also concerned that the terms of the offer provided IBM with too much flexibility in being able to walk away from the deal, the Journal reported.
Prior to reports that the companies were in merger talks, Sun Microsystems had closed at $4.97 a share and had been trading below $5 a share for a number of months.
Whether Sun would entertain resuming merger talks if IBM sweetened the deal was not clear, the Journal noted.