Light Reading

Palm Action Heats Up

Dan Jones
LR Mobile News Analysis
Dan Jones, Mobile Editor
2/28/2007
50%
50%

The bidding for handheld computer pioneer Palm Inc. is heating up, with Nokia Corp. (NYSE: NOK) and possibly a private equity firm emerging as the leading candidates to acquire the company, Unstrung has learned.

Sources close to Palm and investment bankers familiar with the deal say the bidding process is proceeding for the smartphone maker and that the company could be sold in the $20-per-share range.

Unstrung reported earlier this month that Palm is once again an acquisition target. Sources said then that a private equity firm could be one of the major bidders. Motorola Inc. (NYSE: MOT) was also named as potential buyer, but it now appears to be fading from the picture. A well-placed source suggests that a Motorola buyout is definitely not going to happen. Morgan Stanley is said to be shopping the firm around. (See Palm's in Play .)

A private equity buyout would follow a growing trend in the wireless business of these groups spending large sums to buy up technology assets. Last year Koninklijke Philips Electronics N.V. sold an 80.1 percent stake in its former semiconductor division to a group of private equity investors led by Kohlberg Kravis Roberts & Co. (KKR) for $5.58 billion.

Rumors about a Palm sell-off first gained serious momentum earlier this month when its shares rose in an unexpected growth spurt. Separately, a major hedge fund, Galleon Group LP , reported in a 13-G filing with the SEC that it had snapped up just over 6.3 million shares -- about 6.2 percent of the 102 million outstanding shares -- of Palm stock.

The company is said to be attracting attention from the buyout crowd because of its $500 million cash position and significant cash flows.

An industry source familiar with the company says that Palm has been weighing its options for a while. "They're at a crossroads," he says, asking to remain anonymous.

The company could choose to continue operating as a going concern and compete in the highly competitive wireless market against larger rivals such as Nokia, Motorola, and BlackBerry . This is said to be the favored option of some of the management team.

Some shareholders, however, are rumored to be pushing the company to examine a partial or complete buyout. This could involve an outside investor putting in a "significant infusion of cash" and installing a new management team, or it could mean a full takeover. "My sense is that they're eventually going to get out," the source says. "Simply because a lot of other companies are so far ahead innovation-wise."

This explains why a deal is ripe to occur now, while the company still maintains brand equity and a large installed base of handheld users.

Yesterday, Palm shares were trading flat at $15.92. Not bad, considering that the Nasdaq fell 96.65 points, or 3.9 percent, in one its worst trading days since September 2001.

— Dan Jones, Site Editor, Unstrung

(4)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
IPobserver
50%
50%
IPobserver,
User Rank: Light Beer
12/5/2012 | 3:13:43 PM
re: Palm Action Heats Up
What an amazing brand to own.
techgnochhi
50%
50%
techgnochhi,
User Rank: Light Beer
12/5/2012 | 3:13:41 PM
re: Palm Action Heats Up
agree with you on the brand value, but doesn't it almost seem like mutual brand value dilution for Nokia to buy Palm? Takes away a bit from both....
joset01
50%
50%
joset01,
User Rank: Light Beer
12/5/2012 | 3:13:40 PM
re: Palm Action Heats Up
To a degree but for Nokia a Palm buy would be all about having a real story for business and higher phones in the U.S. Palm gives them that right off the bat.

-- DJ
IPobserver
50%
50%
IPobserver,
User Rank: Light Beer
12/5/2012 | 3:13:36 PM
re: Palm Action Heats Up
Exactly. Palm is huge in corporate America, where Nokia is still weak.

Palm sounds much better than "E-Series".
Flash Poll
From The Founder
Ericsson's Hyperscale Datacenter System (HDS) 8000, featuring Intel's Rack Scale Architecture, caused a stir when it was announced at MWC 2015. For more on this revolutionary product, join me on Thursday, April 30 at 12:00 p.m. EST for a Super Webinar event, A New Hardware Paradigm for the Telco Data Center.
LRTV Documentaries
CableLabs' Clarke Updates Cable Virtualization

4|23|15   |   05:41   |   (1) comment


Former BT exec now leading CableLabs' NFV and SDN efforts explains key role of open source and updates efforts to virtualize the home network.
LRTV Interviews
Ericsson's CTO Talks Transformation: Pt. II

4|23|15   |   08:19   |   (1) comment


In the second installment of an in-depth two-part interview, Ericsson's CTO Ulf Ewaldsson talks to Light Reading CEO and founder Steve Saunders about cultural change, network slicing and technology advances.
LRTV Interviews
Ericsson's CTO Talks Transformation: Pt. I

4|23|15   |   09:27   |   (3) comments


In the first installment of an in-depth two-part interview, Ericsson's CTO Ulf Ewaldsson talks to Light Reading CEO and founder Steve Saunders about the incredible transformation underway in the communications networking industry.
LRTV Documentaries
LTE Paves the Way for the 5G Revolution

4|20|15   |   4:20   |   (0) comments


Håkan Andersson, head of 5G product strategy of the Radio Business Unit at Ericsson, discusses the role of LTE, the US and other industry verticals in building a true 5G ecosystem.
LRTV Documentaries
The 3GPP's Road to 5G Standardization

4|17|15   |   4:43   |   (0) comments


Satoshi Nagata, chairman of the 3GPP's TSG-RAN group and a manager at NTT Docomo, explains the standardization process for 5G, as well as the biggest challenges and opportunities.
LRTV Documentaries
AlcaLu CTO Makes the Case for a New 5G Air Interface

4|16|15   |   3:54   |   (0) comments


Michael Peeters, CTO of wireless at Alcatel-Lucent, explains why 5G will require a new air interface to meet its diverse performance targets.
LRTV Documentaries
AlcaLu + Nokia: The New Uber-Vendor

4|15|15   |   2:42   |   (4) comments


Heavy Reading Senior Analyst Gabriel Brown discusses the technological and competitive opportunities and challenges if a merger between Alcatel-Lucent and Nokia comes to pass.
LRTV Huawei Video Resource Center
Huawei's Data Center Power Play

4|15|15   |   6:22   |   (0) comments


Huawei has developed industry-leading energy efficiency capabilities for its indoor and outdoor data center solutions, explains Dr. Fang Liangzhou, vice president of Huawei's Network Energy product Line.
LRTV Huawei Video Resource Center
Huawei’s Routers, Switches Get the Green Mark

4|15|15   |   2:02   |   (0) comments


TUV Rheinland's Frank Dudley explains how Huawei's routers and switches have been successfully tested by energy efficiency experts and have gained Green Mark Certification.
LRTV Documentaries
A Finn, a Frenchman & a Guy From New Jersey Walk Into a Merger...

4|15|15   |   3:17   |   (0) comments


Stop us if you've heard this one before... Light Reading CEO Founder & CEO Steve Saunders weighs in on the technical and cultural implications of a Nokia and Alcatel-Lucent merger.
LRTV Huawei Video Resource Center
Accounting for Better Solutions

4|10|15   |   02:31   |   (1) comment


Murad Yousuf, CTO at Saudi Arabia's Ministry of Finance (Dept. of Zakat & Income Tax), talks about the benefits of deploying router technology from Huawei.
LRTV Huawei Video Resource Center
What's in Store for Huawei & DataCore?

4|10|15   |   05:44   |   (0) comments


At the CeBIT trade show in Hannover, Germany, George Teixeira, CEO of software-defined storage (SDS) specialist DataCore Software, explains why he has just signed a partnership agreement with Huawei Technologies.
Upcoming Live Events
May 6, 2015, Georgia World Congress, Atlanta, GA
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 10, 2015, Chicago, IL
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 6, 2015, Westin Peachtree Plaza, Atlanta, GA
November 11-12, 2015, The Westin Peachtree Plaza, Atlanta, GA
All Upcoming Live Events
Infographics
In its latest survey covering network operators' plans and strategies for ICT transformation, Heavy Reading asked telecom operators worldwide to identify the most important goals and objectives for their ICT transformation initiatives. Heavy Reading also asked operators about the importance of a "digital first" strategy, which enables customers to complete an interaction across different digital channels, such as web and mobile self-service and social media.
Hot Topics
What if the Comcast Merger Fails?
Mari Silbey, Independent Technology Editor, 4/20/2015
Google's WiFi-First Mobile Service 'Fi' Is Here
Dan Jones, Mobile Editor, 4/22/2015
Comcast Merger May Hinge on Hulu
Mari Silbey, Independent Technology Editor, 4/22/2015
Comcast Formally Ends Its Bid for TWC
Mari Silbey, Independent Technology Editor, 4/24/2015
Google Ready to Release Thousands of Loons
Sarah Thomas, Editorial Operations Director, 4/20/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Many leading communications companies can claim to have undergone significant periods of reinvention during their histories, but none have been through more major ...
Data Center Interconnect, or DCI, is one of the hottest sectors in telecom currently. Since coming back to Light Reading last year, prodigal-son style, I've ...
Cats with Phones
Learning Curve Click Here
Pierre could never remember how to use Excel.
Latest Comment