Rumours fly of Acer, Gateway tieup

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Gateway acted to douse mounting speculation that the PC maker is a takeover target and that Taiwan's Acer is gearing up to buy the US-based firm. Analyst reports have credited Acer with being eager to make a major purchase this year and Gateway's delicate position as a high-volume but financially struggling producer caused many pundits to connect the two. Today, Gateway claimed that it is not in M&A talks with its rival.

For years, Gateway (then known as Gateway 2000) was considered a close peer to Dell. Both companies started at roughly the same time and with the same direct-to-buyer, build-to-order business philosophy. As Dell began to pull away from its rivals in the 1990s, Gateway experimented with a number of diversification strategies, including big-screen TV/computer combinations, a flirtation with niche computing in the form of its acquisition of the Amiga computer technology, and a retail store chain. Eventually Gateway fully capitulated on its build-to-order strategy, merged with low-end retail anchor eMachines, and now competes as a full hybrid. Last year Gateway had three CEOs, beginning with deposed eMachines chief Wayne Inouye. Acer, meanwhile, is seen as a rising star and in striking distance of overtaking Lenovo on the global PC market.

The buyout rumors have not disrupted one mainstay of Gateway stock transactions. Gateway co-founder Ted Waitt, who served two stints as CEO of the company in addition to serving as its chairman for most of its existence, has been burning off his stake in Gateway at a rapid clip for over a year with sales virtually every business day but still holds tens of millions of shares, according to securities filings. Those sales do not appear to have materially changed in recent weeks.

This is the second time in just six months that Gateway has been connected to major purchase rumors. Recently, a former eMachines owner attempted to purchase Gateway's retail operations-in essence, to buy back eMachines-for nearly $450 million, but was rebuffed.

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