Reports in The Wall Street Journal claim that IBM is close to finalising a deal to buy Sun Microsystems.
IBM is said to be offering $9.55 a share for Sun, which would value the company at around $7bn. Shares in Sun are currently trading at around $8.20 and have risen today on the news.
However, the reports indicate that Sun is trying to negotiate a deal in which it will co-operate as long as IBM agrees to rigorously defend the merger against anti-trust actions, which remain a considerable worry.
A combined IBM and Sun would control the vast majority of the tape storage market, and nearly two thirds of the high-end Unix server market. Competitors like Dell would be highly likely to appeal to regulators over the deal.
Sun apparently fears that, if the deal is called off for anti-trust reasons, its stock price will suffer, as Yahoo's did when Google was forced to pull out of negotiations for similar reasons.
Edward Henneberry, a Washington DC anti-trust attorney and former anti-trust regulator in Ireland and Brussels, told The Wall Street Journal that Sun may seek an agreement that IBM will go to court if challenged rather than cancelling the deal
Alternatively, Sun may demand that IBM go through with the deal no matter what remedies or divestitures the regulators order.