Buyout offers by AOL and Arris Group ( ARRS) for two Scandinavian technology companies earlier this week are fueling a wave of takeover speculation and a rally in the region.

On Monday, Time Warner ( TWX) unit AOL offered $900 million for Swedish online marketing company TradeDoubler. Separately, Arris announced the $1.2 billion acquisition of Norway-based Tandberg television, a provider of infrastructure products for digital TV.

The deals echo previous acquisitions of Nordic tech companies by large U.S. players -- most notably eBay's ( EBAY) $2.6 billion acquisition of Swedish Internet telephone company Skype in September 2005 -- and have spurred talk of potential bidding wars among other tech giants.

Although AOL's offer was approved by TradeDoubler's board, the majority shareholder, Alecta pension fund, rejected the deal. The snub by Alecta, which owns a 10.01% stake, is expected to attract higher offers by rival firms, possibly Google ( GOOG), Yahoo! ( YHOO) or Value Click ( VCLK), which are interested in the high growth of European ad revenue from search.

Although AOL announced Tuesday it would not raise its bid, it will probably come in with a higher offer, says Mikael Laseen, an equity research analyst for Kaupthing AS, Iceland's largest bank.

"We heard from TradeDoubler in December that they were talking to several buyers, one of which was obviously AOL" says Laseen. "The statement from AOL that they are reluctant to raise the bid is not unexpected; I think they are likely to raise the bid but it's difficult to say by how much."

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