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Microsoft eyeing up the BlackBerry maker?
RIM buyout rumour drives shares up...

By Reuters

Published: Friday 31 August 2007

Shares of RIM moved higher yesterday on renewed market speculation that Microsoft could be interested in buying the BlackBerry maker.

Frederic Ruffy, an analyst at options education company Optionetics in California, said: "Microsoft has been mentioned as a possible buyer.

"According to speculation, the software giant might be interested in RIM in response to recent news that Google is interested in making its own mobile-phone operating system, which would compete with Windows Mobile."

RIM shares were up 3.35 per cent at $84.59 in midday trading on Thursday after posting a new high of $85 on the Nasdaq.

The company's shares regularly move as much as five per cent in a single session, even in the absence of news. The Microsoft rumour has surfaced in the past, as well as speculation that Motorola could buy the Canadian company.

Analysts have heaped upgrades and praise on RIM in recent weeks in wake of strong growth, both in profit and in subscribers.

The company's ubiquitous BlackBerry smart phones have penetrated the professional market but have yet to gain the same acceptance among retail consumers.

To change this, RIM has been loading up its devices with multimedia features such as music players and cameras. It has also worked with carriers to make them more affordable to individuals.

The push into consumer markets could put RIM on a collision course with Apple's iPhone. The competition could grow stiffer still if Google launches its own device.

Some option traders appeared to be betting that RIM shares' strength could continue.

Rebecca Engmann Darst, an equity options analyst at Interactive Brokers Group, said: "I've seen the rumours on RIM and there has been interest in the front-month calls, which allow investors to buy RIM shares at $80 all the way to $93.375 apiece."

Both RIM and Microsoft declined to comment.

A RIM spokeswoman said in an email: "It is RIM's standard policy to not comment on rumours or speculation." A Microsoft representative echoed the statement.