Two top securities litigators said that several large shareholders in Sun Microsystems have approached them about suing directors to force them to reconsider their rejection of IBM’s takeover bid, reports Reuters.
The struggling high-end computer and software company took a major hit after IBM’s takeover bid collapsed. Sun CEO Jonathan Schwartz is being pressured by shareholders to turn the company around.
“I would hate to be in the Sun sales organization at the moment,” said Eric Johnson, director of the Center for Digital Strategies at Dartmouth’s Tuck School of Business. “Pretty much every corporate client is going to ask them: ‘Are you going to be here next year when I need help from you?’”
Despite shareholder concerns, Sun told Reuters that such concerns are unfounded. “Sun is committed to our customers and channel partners, and will continue to do what has always defined the company: innovate for customers,” a company spokesperson said in a statement.
Enderle Group analyst Rob Enderle told Reuters that the collapse damaged Sun’s credibility with the financial services industry, its biggest customer group.
Now that it is widely known that Sun is actively shopping itself around, Sun represents a substantial risk,” said Enderle at the San Jose-based technology consulting and research firm.
When talks of the failed IBM talks leaked out, Sun was left vulnerable to outside perception. “It’s a bit like somebody who has had a serious accident checking out of the emergency room and insisting they can heal themselves at home,” said Charles King, an analyst at consulting firm Pund-IT.