Microsoft to acquire Logitech?

Microsoft to acquire Logitech? Source: A variety of reports citing swirling rumors, most going up in the wake of a Reuters article.

What we heard: Early Thursday, the Reuters news service ran a story on a 12 percent increase in the price of shares for Switzerland-based PC peripheral maker Logitech. As for the cause of that spike, the service simply cited "traders" as speculating that Microsoft was planning a takeover bid on the company. According to one trader, Microsoft was planning to offer 48 Swiss francs (nearly $44) per share of Logitech, for a total of roughly $10 billion.

Mere hours after that report went up, Reuters followed up with another article about the rumors, this one featuring a quote from Logitech board member Daniel Borel, who also happens to be the company's cofounder and single largest shareholder. Though Borel owns only 6 percent of Logitech and said he would neither encourage nor prevent a sale of the company, he did say there was no reason for him to sell his stake, likening it to parents selling their children.

That was followed by a Merger Market news service piece with analysts split on the issue of whether or not such a deal would violate antitrust agreements. Logitech and Microsoft are the two biggest manufacturers of PC mice, and the two make up much of the market in keyboard and Webcam production as well.

With the follow-up reports adding new uncertainty to the rumors, investors backed off of Logitech today, as the peripheral maker gave up most of yesterday's gains, closing down more than 7 percent on the day. Given the vague source of the rumor and that it originated outside of either company involved, the questions raised about regulatory issues, and the Logitech board member's willingness to talk about the idea and at-best apathetic attitude toward it, the only thing that lends credibility to this rumor is that a Reuters reporter determined it newsworthy.

Perhaps Reuters knows something about the source of the rumors that it isn't sharing, but given what's been reported, this doesn't exactly look like a done deal.

The official story: "Logitech does not comment on rumors."--A Logitech representative.
"We do not comment on rumors and speculation."--A Microsoft representative.

Bogus or not bogus?: Looking bogus, but stranger things have happened.