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Tickers in this Article: SAP, MSFT, GOOG, IBM
Few things get the market pumped like takeover talk -- especially one that involves some of the world's biggest technology players.

SAP (SAP) founder and 12% shareholder, Hasso Plattner, said in an interview with the Financial Times that he will not stand in the way of an offer for the German enterprise software maker. He added that there are only three possible buyers: Microsoft (MSFT), Google (GOOG) and IBM (IBM). SAP shares shot up in response to the comments.

Sure, merger speculation can lift a stock's price, at least in the short-term. But as a rule, it's rarely a good idea to invest in a company based on a bit of chatter. Merger speculation is cheap and notoriously unreliable. Indeed, Plattner's talk of a purchase by Google, Microsoft or IBM, is just that -- talk that investors can afford to overlook.

For starters, a Microsoft deal has low odds of ever happening. Microsoft explored a merger with SAP back in 2004, but quickly backed out. It recognized how tough it would be to combine the two companies and the anti-trust backlash it would ignite. Microsoft is still keen to keep regulators happy. Nothing suggests that things are any different in 2006.

Google won't be coming to the table. The company already has its hands full with a plethora of diverse projects, wireless Internet access to Internet telephony to bio-informatics. It's hard to imagine Google absorbing a company with five times as many employees in a totally new area of business.

Google's share value is fully extended, so SAP's board would rightly demand cash. But SAP has an enterprise value of about $60 billion -- Google doesn't have that kind of money kicking around.

Even IBM is a long shot. IBM prefers to partner with a wide range of enterprise software companies. Purchasing SAP would put it in direct competition with its existing partners. IBM's balance sheet would be seriously stretched by a cash deal.

In my mind, Plattner's comments about a deal look like nothing more than smoke, with no fire at all. In fact, it will only be tougher for SAP to get bought out now with the stock up higher on the news. But maybe that was Plattner's intention all along.

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