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It seemed like a done deal. But in the high-stakes M&A game, things can easily fall to pieces.
Just look at IBM (NYSE: IBM). Over the weekend, the firm withdrew its $7 billion bid for Sun Microsystems (NASDAQ: JAVA). It's yet another heart-breaker for beleaguered Sun shareholders.
Actually, according to the Wall Street Journal [a paid publication], it looks like IBM was the only company interested in a deal. So, even though Sun had little negotiating leverage, it acted as though it had a lot – that is, by holding out for a higher valuation and firmer deal protections (such as "change of control" clauses that provided Sun execs with lush payouts). Well, I guess IBM didn't need Sun that badly or if anything, was certainly willing to play hardball.
True, there was a decent rationale for IBM's play for Sun, which has a good footprint in the server market. But the dynamics of the industry are fluid. For example, Cisco (NASDAQ: CSCO) is moving in.
OK, what's next Sun? Well, I had a chance to talk to Miko Matsumura, who is the VP and Deputy CTO at Software AG. According to him: "Mark my words, Sun's CEO, Jonathan Schwartz, is toast, IBM deal or no deal. If the IBM deal fails completely (most likely outcome), look for Scott McNealy to pull a Michael Dell (or a Jerry Yang, depending on how you look at it) and to appoint himself CEO again. The board of Sun wouldn't allow such a thing if there were even one viable suitor left. But there isn't."
Tom Taulli is the author of various books, including The Complete M&A Handbook
and the founder of BizEquity, a free online business valuation tool for small businesses. 
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