Lenovo leaves IBM takeover table

Lenovo has walked away from IBM takeover discussions, as both companies clash over the valuation of IBM's X86 server business.

Citing unidentified sources, Fortune magazine says the multibillion-dollar deal is now off the table, with the Chinese PC maker allegedly dismissing IBM's US$6 billion proposal.

The news follows strong reports last month that Lenovo was considering an acquisition of the X86 server business, with the world’s second-largest PC manufacturer even releasing a statement to the Hong Kong stock exchange dismissing the claims.

“As at the date of this announcement, no material terms concerning the potential acquisition have been agreed," a Lenovo read.

Yet the denial wasn't enough to prevent rumours escalating, with China Daily newspaper reported the companies were in 'preliminary negotiations' over a possible deal.

Reuters says IBM declined to comment on the news, while Lenovo admitted it was in early talks about a potential acquisition but refused to name the firm.

Despite the set-back however, negotiations could still resume, following in the footsteps of Lenovo's purchase of IBM's PC division in late 2004.

Can a deal be struck? Is US$6 billion too big a valuation? Tell us your thoughts below