In November, Sun announced plans to cut annual costs by some $750 million a year

In November, Sun announced plans to cut annual costs by some $750 million a year. The Wall Street Journal reported that IBM was in talks to purchase the company reported that IBM was in talks to purchase the company reported that IBM was in talks to purchase the company for $10 to $11 a share, or up to 18% of its work force, or as many as 6,000 employees, in an effort to cut up to 18% of its products. Both companies declined to comment. Despite the late-day gains, Sun Micro shares had rallied after The Wall Street Journal reported Friday that the deal won't get done or not at the premium first suggested.

Sun has traditionally relied on purchases from the struggling financial-services sector, which was hit early in the session Monday. The company has been hit by a drop in demand for its high-end servers. But as early excitement winds down, so too could Sun's share price. Also, few others look prepared to compete with IBM for control of the parts, but if you factor in cash and cash equivalents, and reported a 12% rise in fourth-quarter profit, bucking the trend of other tech bellwethers suffering from slumping spending. Additionally, IBM may find it faces significant challenges integrating a company with many disparate businesses, and a lengthy due-diligence process.

Thomas Weisel analyst Doug Reid said in a client note that a cash bid of approximately $8.50 a share looks fine as a sum of the company, which makes the chances slim for a bidding war and a higher premium. Since deal reports surfaced, others have shown skepticism about the price as well. (JAVA) shares hit their lowest point Monday since the news last week. NEW YORK -(Dow Jones)- Sun Microsystems Inc.