Microsoft

(MSFT) - Get Report

was up about 35 cents in early premarket trading on news that it plans to acquire Navision, a Danish software company, in a deal worth about $1.2 billion.

Although Navision declined to comment,

The Financial Times

is reporting that Microsoft has entered negotiations to acquire the enterprise software company, which would help widen its European distribution channels.

Microsoft got into the enterprise software market last year when it purchased Great Plains software, and the Navision deal would give it access to the company's 133,000 clients and $181 million in annual revenue.

Shares of Microsoft were up 0.7% to $52.59 in Instinet trading after closing at $52.24 Monday.