Negotiations between IBM and Lenovo over the sale of the former’s x86 server business have apparently come to an abrupt halt, with reports suggesting that the two parties have failed to agree on a price.

The Wall Street Journal reports that talks have broken down due to “valuation concerns”, though it states that the two companies might still return to the negotiating table at a later date. So far, neither Lenovo or IBM have made any comment on the news.

As SiliconANGLE revealed last month, IBM is reportedly seeking around $5 billion to $6 billion for its server business, while Lenovo separately confirmed that it was negotiating to buy a third-party server business, without naming the vendor. Should the acquisition go ahead, it would see Lenovo take control of IBM’s low-end System X rack mount and tower systems, though the American firm would retain its BladeCenter and PureFlex servers.

The news that the deal has now hit a snag comes as a surprise, considering that just last week, CRN reported that talks were “moving quickly”, stating that an agreement was close to being finalized. Nevertheless, at least one commentator believes that this breakdown could turn out to be a blessing in disguise for IBM.

Speaking on NewsDesk last week, Wikibon CTO and co-founder David Floyer warned that while selling off its server business would bring short-term benefits, IBM could well find itself disadvantaged in a storage industry that is embracing flash-based architecture wholesale:

“The point about Flash is that storage is gonna move from the storage race, where IBM is still competing, towards the server, and the key to that is having new architectures within the server that will take advantage of Flash being very very close to that server and making clustered systems,” said Floyer.

“If you give away your core competence, the x86 and the ability to design those systems Lenovo you’re going into that emerging market place with one hand tied behind your back.  I think that strategically will be a big mistake for IBM.”

It’s still not clear how the talks will ultimately unfold, but if IBM does walk away it wouldn’t be the first time it has backed down from a multi-billion dollar deal over valuation concerns. Back in 2009, IBM pulled out of a proposed $7 billion takeover of Sun Microsystems, following weeks of intensive negotiation.

Still, judging by IBM and Lenovo’s close relations, the two parties may be able to agree on a compromise. Their close relationship goes back to 2005, when Lenovo famously acquired IBM’s PC arm in a $1.25 billion deal. As part of this agreement, IBM acquired a sizeable 18.9% stake in the Chinese firm. In addition, the deal saw IBM become the primary provider of customer financing and services to Lenovo, whilst its new-found friend became IBM’s preferred supplier of PCs.