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Gateway Denies Takeover Talk

Alexei Oreskovic

Gateway(GTW Quote) shot down rumors that the company is in discussions to be acquired.

In a statement Tuesday, a Gateway spokesperson said the Irvine, Calif., PC maker has not had talks with Taiwan-based Acer.

"While it is company policy not to comment on rumor and speculation, in light of continued reports surrounding Acer's plans for an acquisition in 2007, I can confirm that Gateway is not in negotiations with Acer," said Gateway spokesperson David Hallisey.

Gateway's shares, which had recently run up in anticipation of a deal, fell nearly 7% in extended trading Tuesday to $2.22.

Several recent reports by Wall Street analysts have suggested that Acer might snap up Gateway in order to bolster its presence in the PC market in the U.S., where Gateway is the No. 3 player. On Monday, Gateway's shares rose 6% to $2.40 on speculation that a deal might be in the offing.

Acer is the No. 4 PC maker in the world, by units. In an interview with The Wall Street Journal last week, Acer CEO J.T. Wang said the company was "looking at some candidates we want to pick up" this year.

Wang said Acer has already had discussions with one possible acquisition target, although he declined to name the company.

Gateway, which has struggled in recent times, has attracted other takeover interest in recent months. In September, John Hui, the co-founder of eMachines, offered to buy Gateway's retail business for $450 million. Gateway turned down the offer.

In December, a group of activist investors fed up with the company's poor performance forced Gateway to add two of its members to the company's board.