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Microsoft bond issue triggers takeover talk

SAP, RIM, Palm or Yahoo on supposed shopping list

By CBR Staff Writer

News of a $3.75 billion bond issue by Microsoft, the first in the company’s history and a step it insists is for ‘general corporate purposes,’ has sparked rumours of an imminent shopping spree.

The most talked-about takeover target for Redmond has been German business application supplier SAP AG, but various commentators have variously linked Microsoft with mobile operating platform provider Palm, Blackberry supplier Research in Motion, not to mention the search engine house of Yahoo.

Microsoft chief Steve Ballmer apparently said earlier today that speculation the company may buy German software firm SAP was a ‘random rumour.’

The company has a cash hoard of more than $25 billion, and has said in a filing to the Securities and Equities Commission that the net proceeds from the bond sale will be used for working capital, capital expenditures, and repurchase of capital stock, as much as it could be for acquisitions.

Microsoft shares have declined 34% in the past year, and the company does have a plan to purchase more than $40-billion worth of its own stock. It has also long been criticised for not having much debt on its balance sheet.

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