Logitech Shares Surge on Microsoft Bid Chatter
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ZURICH -- Shares in Swiss-based computer peripherals maker Logitech International SA gained up to 12 percent on Thursday amid speculation Microsoft would launch a takeover bid, traders said.
But board member Daniel Borel, who is the group's largest shareholder, said he had no reason to sell his 6 percent stake and declined to comment on the market speculation.
"I am a co-founder of Logitech. Would you be willing to sell your child?" Borel told Reuters in an interview.
Traders said rumors circulated that Logitech, which has a market capitalization of around 7 billion Swiss francs ($6.3 billion), would receive a takeover bid at 48 francs per share from Microsoft.
This would represent a premium of 38 percent to Wednesday's closing price of 34.80 francs and value the firm at 9.16 billion francs.
"Rumors are rumors. I can't make any specific comment on them," Borel said.
Logitech and Microsoft both declined to comment.
A Logitech takeover would transform Microsoft, the world's largest software firm, into the world's largest maker of computer mice and other peripheral devices and deepen its push into hardware.
Shares in Logitech pared gains later in the Zurich session and closed 5.8 percent higher at 36.70 francs. Microsoft shares were down 1.3 percent at $33.98 in New York trade by 1838 GMT.
Logitech is the market share leader in PC mice, a market it has shared over the years with Microsoft, which so far has showed little interest in using its monopoly power to dominate a hardware segment such as this.
But Microsoft has established a large market for hardware with its Xbox entertainment console and Logitech's accessories would dovetail with this new segment.
"Microsoft is above all a software company -- it is a very, very large company and only in a couple of "small" fields we compete with each other," said Borel when asked whether Microsoft would be a good partner for Logitech.
Logitech also manufactures a wide range of computer accessories, including Webcams, speakers and keyboards.
The entry of Microsoft into the webcam market dented sales at Logitech, whose products also include remote controls.
Some market participants played down the possibility of a bid.
"Today's share price rise is probably more related to a rebound in the market than any rumors," said Michael Foeth, analyst at bank Vontobel, which rates Logitech a "buy".
"Logitech has lost almost 20 percent since the start of the year," said another Zurich trader. "Now they're covering shorts. The rumors are just a bunch of talk."
With a price-earnings ratio of 18.8 on forecast 2008 earnings, Logitech is already one of the most expensive firms in the Dow Jones index of European tech shares .
Logitech reports its fiscal third-quarter results on January 17.