Sequent Computer Systems Inc. (Nasdaq: SQNT) soared on speculation Tuesday that IBM Corp. (NYSE:IBM) is in talks to buy the company. The talks were reported in The Wall Street Journal.
Shares in Sequent were up 4 1/8 to 18 1/8 in opening trading, after a close of 14 Monday. Sequent's stock market valuation is currently around $600 million, and it expects 1999 revenue of $840 million.
According to "one person familiar with the matter," the discussions are in an advanced stage, though they could still break down, and a deal could be announced in the next few days, according to the Journal.
The acquisition of Sequent, which makes high end "mini-supercomputers," would be strategic for IBM's lagging server line. Though hardware sales grew 17 percent in the first quarter of 1999, IBM slacked in the expensive high-end products needed for corporate networks according to the Wall Street Journal. Rival Sun Microsystems Inc. (Nasdaq: SUNW) currently feels a strong demand for their high-end servers.
The Beaverton, Oregon-based Sequent is already involved with IBM to develop a new operating system that will run on an Intel Corp. (Nasdaq: INTC) chip. Sequent and IBM officials refused to comment on the acquisition talk.