Logitech denies rumors of a Microsoft buyout

By Jacqueline Emigh, BetaNews

March 10, 2008, 3:37 PM

Rumors resurfaced this week that Microsoft is targeting PC mouse and keyboard maker Logitech for a multibillion dollar takeover bid. But this time around, the speculation was scuttled by a statement from Logitech's chairman.

Rumors of some sort of behind-the-scenes deal between Microsoft and PC accessories and universal remote maker Logitech have been festering and dwindling away, like a cold sore at the height of flu season. That is until yesterday, when Logitech Chairman Guerrino de Luca was quoted in an Italian newspaper as characterizing such a deal as "an operation without sense.

"There would be problems from antitrust authorities seeing as the two companies together would have a virtual global monopoly in mice and keyboards," de Luca reportedly said

Rumors of a possible Logitech buyout -- variously estimated at $8 to $9 billion -- first came to public attention in January through a interview with Reuters. At that time, Daniel Borel -- a Logitech board member and co-founder as well as the company's largest shareholder -- said he had no reason to sell his shares.

But also in the interview with Reuters, Borel seemed to hint that some sort of takeover attempt was in the works.

"I am a co-founder of Logitech. Would you be willing to sell your child?" I have no reason to sell," Borel reportedly told Reuters. "But I will not be the one to decide. I own only some 6 percent so I will neither enable not prevent a sale of Logitech."

At the time, spokespersons for both companies refused to comment.

That same month, however, Microsoft publicly announced an acquisition of Norwegian-based software maker Fast Search & Transfer. Then came Microsoft's much publicized buyout attempt for Yahoo, originally valued at about $45 billion.

Financial analysts roundly dismissed the speculation as nonsense even before Microsoft came up with the Yahoo offer -- which, if realized, would render a purchase of Logitech just about financially impossible, anyway.

Beyond that, Microsoft and Logitech are competitive rivals. Furthermore, de Luca is likely correct: Big antitrust issues would indeed arise, since world production of computer mice is roughly split at 70% for Logitech and 30% for Microsoft.

How do rumors like this get started, anyway? Was a large shareholder simply trying to push up Logitech's stock price? While that could be part of the answer, Logitech's shares only rose for a single day in January following the Reuters interview.

The rumors were undoubtedly fueled, too, by the fact that so many seemingly unlikely mergers have actually happened over the past few years -- and by the willingness of some people to believe whatever they hear, without always giving it much thought.

In December, by the way, SAP AG Chief Executive Hening Kagermann had to put similar speculation to rest around rumors that Microsoft was targeting SAP for a buyout.