Logitech International (NDAQ:LOGI) shares jumped over seven percent in early trading amid speculation that Microsoft Corporation (NDAQ:MSFT) may be interested in taking over the company. The rumors stemmed from the fact that the software giant boosted its stake in the hardware company by 12 percent in recent weeks. Sources close to the situation say that a takeover bid could approach 48 Franks – or a 38 percent premium to yesterday’s closing price.

Many analysts have been predicting a move by software giants to diversify into hardware through mergers and acquisitions. An acquisition of Logitech by Microsoft would turn the software giant into not only one of the largest software companies in the world, but also the largest peripherals manufacturer in the world. A company that is already ubiquitous with personal computing software also has a lot of leverage that it could use to push hardware products as it has already done with its own lines.

Logitech’s co-founder and largest shareholder, Daniel Borel, declined to comment on Microsoft rumors but said he had no reason to sell his stake. He only owns some 6 percent, however, so he will neither enable nor prevent a sale of the company. Interestingly, he also hinted that Logitech may be a great acquisition by saying it was a company in great shape, growing nicely, with a strong vision for the future.

In the end, this is all great news for Logitech shareholders. A boost in the company’s market capitalization may now help it make some of its own acquisitions “for free” if it is able to hold onto the gains. Otherwise, an acquisition by Microsoft at a 38 percent premium would also be welcomed by shareholders who have been sitting on modest gains in the past. Combined, these factors make LOGI a stock worth watching!

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