Sun Micro flips for a dime

News item: Oracle agreed to acquire Sun Microsystems for about $7.4 billion in cash.

The news is interesting in that Oracle will pay $9.50 per share for Sun’s common stock. This comes after Sun reportedly rejected an acquisition offer from IBM for $9.40 a share (down from an original offer of $10 a share).

So, the Sun Micro board decided to sell out for another dime.

Take away cash held by Sun and the computer maker’s debt, and the Oracle deal is valued at $5.6 billion. Not bad, especially considering that once-hot rival Silicon Graphics is selling its bankruptcy-distressed assets for all of $25 million.

It’s an interesting deal for Oracle, which is one of the world’s biggest software vendors and has industry partnership ties to Sun Micro and its largest competitors, which include Dell and Hewlett-Packard, in addition to IBM. Should make for some interesting conference-room chatter when Oracle management has to negotiate in the future with Dell, HP, and IBM, if this deal is consummated.

Still, Oracle is one of the most-experienced companies in the industry for integrating big acquisitions, so it just might work.