Intel CEO Still Weighing IBM-Sun Impact

Updated from 11:04 a.m. EDT

IBM(IBM Quote) will probably clinch its rumored acquisition of Sun Microsystems(JAVA Quote), according to Intel(INTC Quote) CEO Paul Otellini, who told his employees that he is still undecided on whether the deal is good or bad for the chip giant.

"I can tell you that Sun was shopped around the valley and around the world in the last few months," he said, during a Q&A session that was revealed in a regulatory filing. "A lot of companies got calls or visits on buying some or all the assets of the company."

M&A talk first swirled around IBM and Sun last week. The deal is rumored to be worth around $6.5 billion, with IBM paying $10 or $11 a share for the struggling tech giant.

"It looks like IBM is in the hunt now," added Otellini. "And at a hundred and some odd percent premium, I suspect they'll get it."

More recently, however, some buy-side analysts have said that the deal may be closer to $8 or $9 a share than the original $10 to $11 figure.

As for the impact on Intel, which supplies processors for both IBM and Sun servers, Otellini still hasn't worked that one out.

"Is it good or bad for us? I don't know," he replied to an employee's question. "I'd rather have Sun be independent, I guess."

Intel, which is sitting on a mountain of aging PC chips, will be keen to see how the tech market shakes out during the coming months. Intel will unveil its next-generation Nehalem processor next week, and it needs to ensure that its existing routes to market remain open.