Gateway May Still Be in Play

SAN FRANCISCO -- Executives at Gateway(GTW Quote) and Acer carried on about the many benefits of teaming up to sell PCs in the U.S., after announcing their $710 million merger Monday.

But for the real significance of the deal, investors may be better off looking to Asia, where Taiwan's Acer and China's Lenovo are engaged in a fierce battle for the No. 3 spot in the worldwide PC market.

This rivalry is likely to become even more heated as a result of Monday's deal and may hint that Acer's offer to acquire Gateway is not the end of the story.

According to one person close to the situation, the merger agreement between Gateway and Acer has a superior offer clause, which would allow a third party to swoop in and top Acer's $1.90 a share cash offer.

A likely candidate to make such a move is Lenovo, which has seen its market share increasingly placed under siege by Acer and will be bumped down into fourth place in the PC market if the deal goes through.

A competing bid from Lenovo is "well within the realm of possibilities," according to the source.

A spokesman for Gateway said he could not comment on whether a superior offer clause was part of the deal's terms, as the agreement is not yet public.