The NYT reports that IBM’s acquisition talks with Sun may collapse. Sun’s board rejected IBM’s offer because it was too low. Sun sent IBM a notice terminating an agreement for exclusive negotiations. The letter breaks off the acquisition talks.

IBM’s $7 billion offer was above Sun’s market cap. After due diligence, IBM lowered its offer from $9.55 a share to $9.40 a share.

Sun has been looking to sell for over a year. Now that its exclusive contract with IBM has ended, the company is free to pursue other buyers.