Microsoft is rumoured to be exploring a takeover of US-based video rental service Netflix, after shares in the latter climbed by more than 13% on Friday to close at almost US$70.
While the US stock exchange has been shut since the weekend on account of Hurricane Sandy, the Microsoft rumours follow speculation earlier this month that it could be interested in the VoD firm.
This came after Netflix CEO Reed Hastings announced he would not seek re-election to the Microsoft board at its shareholders AGM next month.
Announcing his decision on October 9, Hastings said: “I’ve decided to reduce the number of boards I serve on, so that I can focus on Netflix and on my education work,” though commentators have speculated it could be a prelude to a takeover offer.
Hastings, who joined the Microsoft board in 2007, currently also serves on the boards Facebook, Dreambox Learning, the Knowledge Is Power Program (KIPP), and the California Charter Schools Association (CCSA).
A Forbes report speculated that Microsoft could offer twice Netflix’s Friday market cap of US$3.7bn and still use less than 10% of its US$69bn cash hoard.
Last December, Netflix’s shares climbed following speculation that US telecoms giant Verizon was interested in buying the video rental service.