and MARY FAGAN
Shares in Apple, the beleaguered computer group, jumped last night amid speculation that it was poised to accept a takeover offer from Sun Microsystems, the maker of high-end computer work-stations.
First whispers of the deal emerged as Apple's chief executive, Michael Spindler, was preparing for what promised to be an angry annual shareholders' meeting yesterday in Cupertino, California, where the company is based.
At the same time the company, once the darling of the industry, said it had appointed one of its executives, Satjiv Chahil, to the newly-created role of senior vice-president of corporate marketing.
The absorption of Apple by Sun would signal a fundamental recasting of the computer industry landscape. It would in effect sound the death-knell for Apple, which pioneered the marketing of easy-to-use personal computers to consumers in the 1970s and 1980s with its Macintosh operating system.
More recently Apple has been beset by problems for which Mr Spindler has received widespread criticism. Last year, it failed to keep up with demand for some of its lap-top products and dramatically cut its prices in a bid to defend market share. It recently announced losses of $69m for the quarter ending on 29 December, which should have been its most lucrative.
The company's crucial difficulty has been fending off the increasing dominance of the so-called Wintel system for personal computers that use the Window's package developed by Microsoft with powerful computing chips manufactured by Intel. In spite of its enduring popularity among some consumers because of the simplicity of its system, Apple has only 8 per cent of the US per sonal computer market.
Details of the deal were reported by yesterday's Wall Street Journal, which said that a final agreement was "imminent". The paper said it was likely to be a stock-swap transaction valued at about $4bn, or $33 per Apple share. That would be half of what Apple reportedly asked IBM for the company during takeover negotiations in 1994.
Scott McNealy, Sun's chief executive, is believed to have been meeting with his staff over the past few days to put the finishing touches to an offer. The closure of a deal would be a significant coup for Mr McNealy, who at the age of 27 founded Sun with three partners and has seen it rise over the past 14 years to become one of the stars of the industry.
Sun built its success on workstations using the Unix software system which networked with hardware and software from a variety of manufacturers. The company, which went public in 1986, is also cashing in on the Internet boom, providing more than half of all Internet servers.
Reports about a link with Apple surfaced in 1995 but talks were apparently suspended late last year when Apple first indicated that it was on track to make a loss for the quarter.
Last week, Apple unveiled the beginnings of what was expected to be a radical restructuring. But the hopes of those who expected the board to demand the resignation of Mr Spindler were dashed.
If Sun does acquire Apple, it is expected that it would largely abandon the production of Apple Macintosh computers and license their manufacture to other companies.Reuse content