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
Last week I dropped in on "Hotlanta," Georgia to moderate Light Reading's inaugural DroneComm conference – a unique colloquium investigating the potential for drone communications to disrupt the world's telecom ecosystem. As you will see, it was a day of exploration and epiphany...
Between the CEOs
Affirmed Networks CEO: Digging Into NFV

5|28|15   |   40:26   |   (2) comments


Hassan Ahmed, CEO of Affirmed Networks, is making some big claims for his NFV startup. I sat down with him at the Light Reading HQ in New York City to get the skinny on what this Acton, Mass.-based startup is up to.
LRTV Documentaries
Cable Eyeing SDN for Headend, Home Uses

5|26|15   |   05:57   |   (1) comment


CableLabs is looking at virtualizing CMTS and CCAP devices in the headend, as well as in-home devices, says CableLabs' Karthik Sundaresan.
LRTV Documentaries
Verizon's Emmons: SDN Key to Cost-Effective Scaling

5|22|15   |   03:53   |   (0) comments


For Verizon and other network operators to ramp up available bandwidth cost effectively, they need to move to SDN and agree on how to do that.
LRTV Documentaries
Lack of Universal SDN a Challenge

5|21|15   |   04:51   |   (3) comments


Heavy Reading Analyst Sterling Perrin talks about how uncertainty about SDN standards and approaches may be slowing deployment.
LRTV Custom TV
Steve Vogelsang Interview: Carrier SDN

5|20|15   |   05:02   |   (0) comments


Sterling Perrin speaks to Steve Vogelsang, Alcatel-Lucent CTO for IP Routing & Transport business, about the new Carrier SDN-enabling Network Services Platform and the operator challenges it solves.
LRTV Custom TV
Carrier SDN: On-Demand Networks for an On-Demand World

5|20|15   |   20:52   |   (0) comments


Steve Vogelsang, Alcatel-Lucent CTO for IP Routing & Transport business, talks about requirements and benefits of Carrier SDN during the keynote address at the Light Reading Carrier SDN event May 2015.
LRTV Documentaries
The Security Challenge of SDN

5|19|15   |   02:52   |   (0) comments


CenturyLink VP James Feger discusses concerns that virtualization could create new vulnerabilities unless network operators build in safeguards.
LRTV Custom TV
NFV Elasticity – Highly Available VNF Scale-Out Architectures for the Mobile Edge

5|18|15   |   5:50   |   (0) comments


Peter Marek and Paul Stevens from Advantech Networks and Communications Group talk about their NFV Elasticity initiative and the company's latest platforms for deploying virtual network functions at the edge of the network. Packetarium XL and the new Versatile Server Module: 'designed to reach parts of the network that other servers cannot reach.'
LRTV Huawei Video Resource Center
Bay Area Spark Meetup 2015

5|14|15   |   3:54   |   (0) comments


Developed in 2009, Apache Spark is a powerful open source processing engine built around speed, ease of use and sophisticated analytics. This spring, Huawei hosted a meetup for Spark developers and data scientists in Santa Clara, California. Light Reading spoke with organizers and attendees about Huawei's code contributions and long-term commitment to Spark.
LRTV Custom TV
The Transport SDN Buzz

5|12|15   |   06:01   |   (1) comment


Sterling Perrin, senior analyst at Heavy Reading, speaks with Peter Ashwood-Smith of Huawei and Guru Parulkar of ON.Lab about the evolution of transport SDN and the integration of technologies.
LRTV Custom TV
Next-Generation CCAP: Cisco cBR-8 Evolved CCAP

5|5|15   |   04:49   |   (0) comments


John Chapman, Cisco's CTO of Cable Access Business Unit and Cisco Fellow, explained the innovation design of Cisco's cBR-8, the industry's first Evolved CCAP, including DOCSIS 3.1 design from ground-up, distributed CCAP with Remote PHY and path to virtualization. Cisco's cBR-8 Evolved CCAP is the platform that will last through the transitions.
LRTV Custom TV
Meeting the Demands of Bandwidth & Service Group Growth

5|1|15   |   5:35   |   (0) comments


Jorge Salinger, Comcast's Vice President of Access Architecture, explains how DOCSIS 3.1 and multi-service CCAP can meet the demands of the bandwidth and service group growth.
Upcoming Live Events
June 8, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 10, 2015, Chicago, IL
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 6, 2015, The Westin Peachtree Plaza, Atlanta, GA
October 6, 2015, Westin Peachtree Plaza, Atlanta, GA
All Upcoming Live Events
Infographics
Procera has gathered facts, stats and customer experience feedback from a survey of 540 users from across the globe.
Hot Topics
Charter Seals Deals for TWC, Bright House
Mari Silbey, Senior Editor, Cable/Video, 5/26/2015
Eurobites: Alcatel-Lucent Trials 400G in Czech Republic
Paul Rainford, Assistant Editor, Europe, 5/26/2015
Will Carriers Follow Facebook's Networking Lead?
Mitch Wagner, West Coast Bureau Chief, Light Reading, 5/28/2015
Charter Plans Business Services, Wireless Push
Alan Breznick, Cable/Video Practice Leader, 5/27/2015
Facebook Reinvents Data Center Networking
Mitch Wagner, West Coast Bureau Chief, Light Reading, 5/26/2015
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
On May 29th 1 PM ET, Steve Saunders, founder and CEO of Light Reading, will be drilling into the "pains and gains" of NFV with Saar Gillai, SVP & GM for NFV at Hewlett-Packard Co. (NYSE: HPQ) (HP). He has defined a four-step NFV model describing a sequence of technology innovation. It's a must-read doc for any network architect looking to get to grips with their NFV migration strategy. Join us for the interview, and the chance to ask Saar your NFV questions directly!
Hassan Ahmed, CEO of Affirmed Networks, is making some big claims for his NFV startup. I sat down with him at the Light Reading HQ in New York City to get the skinny on what this Acton, Mass.-based startup is up to.
Cats with Phones