Apple, Sun agreement expected after market closes
Copyright 1996 Nando.net
Copyright 1996 Bloomberg
CUPERTINO, Calif. (Jan 26, 1996 4:03 p.m. EST) -- Apple Computer Inc.
will agree to be acquired by Sun Microsystems Inc. after the stock
market closes today, according to people familiar with the companies.
The agreement will be a stock swap valuing Apple at about $33 a share,
or about $4 billion, one of the people said. That's much higher than the
$23-a-share bid reported yesterday by the New York Times.
Several investors have said that neither price is acceptable.
"There will be significant shareholder resistance at any price not in
the $40s," said Orin McKluskey, who owns about 10,000 shares of Apple.
He said he would vote against an offer of $33 a share.
McKluskey said the company is not giving shareholders any information
and there is no clear strategy outlined for Apple if it does remain
independent. "It's very frustrating," he said.
In late trading, Apple shares were down 1/4 at 30. Sun shares were down
1 at 42 7/8.
Apple said it has no plans to make any sort of announcement this
afternoon and would not comment directly on whether it's in
negotiations. Sun was not immediately available for comment, though it
has consistently declined comment all week on speculation that it was
seeking to buy Apple.
On Tuesday after an Apple board meeting, Chairman and co-founder A. C.
Markkula told reporters Apple "is not for sale." He wouldn't comment on
whether Apple is in talks with potential buyers.
Talks between the Mountain View, California, workstation maker and its
Silicon Valley neighbor, have been going on for several weeks, people
familiar with the discussions have said. Many investors and financial
analysts still say the buyout will not happen because the companies
can't agree on a price.
Last week Apple reported a $69 million loss in its fiscal first quarter,
and said it would fire 1,300 people, or 8 percent of its staff. Some
analysts have said they don't expect Apple to make a profit until the
Apple has been plagued by string of problems, starting with a
conservative forecast of demand that cost the company nearly $100
million in lost sales last year. Apple also has struggled with
production problems, management turmoil, declining market share and
plummeting PC prices.
Apple is falling further behind in the global PC market to Compaq
Computer Corp., the No. 1 PC maker, and International Business Machines
Corp., now No. 2. Apple's market share fell to 8.5 percent in 1994 from
9.4 percent in 1993. Compaq has market share of more than 10 percent.
Sun's been on a roll with its strength in the Internet arena, both as
the leader in computer servers and with its new Java programming
language. However, its primary business, selling workstations to the
engineering, scientific and financial industry is threatened by more
powerful, cheaper personal computers.