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SUN Microsystems (JAVA) : Southeastern could lose US$500M on IBM-Sun merger

Saw this on Bloomberg.

Southeastern Asset Management Inc. paid a total of $2.13 billion, or an average of $13.25 a share, for its 22 percent stake in Sun, according to a January regulatory filing. A deal at $9.40 a share would mean a payout of about $1.5 billion for Southeastern.

And maybe, that is why the ‘rumoured deal’ did not go through.

Southeastern became an active investor back in October and acquired Sun’s shares at US$13.25 a share. On top of that they have tons of call options at US$10 that goes as far as January 2010.

In addition to the stock holdings, Southeastern’s Longleaf Partners Fund paid $10.1 million for call options that give it the right to purchase 5 million Sun shares at $10 each. Those options, now “underwater,” expire in January 2010.

Hmm… Jan 2010. It is not that far, is it?

Better be careful on this counter. Southeastern may just dump it any time, possible?

Bloomberg article here:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aZ9aInPBWMTw