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Local Tech Wire

RESEARCH TRIANGLE PARK, N.C. – Speculation that , the world’s No. 4 PC maker, might buy smartphone maker Palmer is reaching new heights Friday.

In a lengthy report, the Reuters news service says Lenovo “has emerged as the leading candidate to buy” (Nasdaq: PALM).

Palm shares advanced more than 4 percent, or 21 cents, to $5.07 in pre-market trading Friday.

However, the editor-in-chief at the technology news Web site ZDnet is dismissive of the idea.

“Logic dictates that Lenovo is an unlikely savior,” wrote Larry Dignan in a post headlined: “Don’t bet on Lenovo saving Palm.”

Palm has already been ‘rebuffed” by other potential buyers, Reuters reported.

All the talk has also sparked a surge in Lenovo shares, which are traded in Hong Kong, to a two-year high, Reuters added.

“Investment banking sources said they had heard that Lenovo is looking into a possible bid for Palm, but did not have any further details,” the wire service said.

A possible Lenovo bid for Palm has been speculated about for several weeks.

Lenovo recently returned to the smartphone space, reacquiring a mobile phone subsidiary in China. Lenovo is bringing its Android operating system-based “Lephone” to market in China.

Lenovo executives also have said repeatedly that they are interested in possible acquisitions and are committed to doing more business in the mobile Internet space.

According to Reuters, handset maker HTC “was approached about making a bid but decided to pass after reviewing Palm’s books.” Other Asian-based firms also passed.

Reuters noted that a buy of Palm would cost more than $1 billion but also pointed out that Lenovo has cash reserves of $2.4 billion as of the end of 2009.

ZDnet’s Dignan, however, is skeptical even though Reuters points out that Lenovo bought IBM’s PC business five years ago. Its headquarters are based in Morrisville, but most Lenovo operations are located in China, where the company was launched,

“The entire Palm theory seems to rest on the concept that Lenovo wants to be U.S. player and will spend money to get there,” Dingan wrote. “But what does Palm bring to the table here? Lenovo’s purchase of IBM’s PC business made strategic sense. IBM’s PC business wasn’t perfect, but let’s just say the ThinkPad and thousands of corporate accounts are in a league much higher than the Palm brand.”

Simply put, the Lenovo bid may still happen, but doesn’t exactly add up,” Dingan added.