Is A Palm Sale Imminent?

Written by Adam Gosling

Wednesday, 21 March 2007

Rumours about the possible acquisition of handheld PDA and smartphone maker Palm have been swirling around for a couple of years now, with nor real substance to them. Even this month,while the rumours have been there, there's been nothing concrete worth reporting. Now all of a sudden there's an urgency in the air that may indicate a deal is, in fact, on the table. Palm is due to make its Q3 2007 fiscal results presentation on the 22nd and the rumour is that the intermediary handling the negotiations is trying to wrap up a deal in time for that announcement. According to this report Morgan Stanley, which was rumoured to have been hired by Palm to assist with finding a buyer was keen for a deal to get a deal signed by this Thursday. While handset giants Nokia and Motorola are the most often linked companies, this report seems to indicate that something of a bidding war has seen a total of four players making bids. for the company which has a market cap that was around US$1.7 billion a couple of months ago but is now approaching US$2 billion with all the takeover speculation driving the shares higher. Totally unsubstantiated reports have suggested that Palm prefers a private equity buyer and that two, Texas Pacific Group or Silver Lake Partners make up the four biddersvying for the company. None of it seems to make perfect sense. Nokia, by far the leading handset maker doesn't really need access to the Palm Treo range, the Palm OS or the company's sales or engineering talents. It is not out of the question, though. Nokia's own E Series doesn't have as much traction as the Treo in North America and some pundits see a Palm acquisition as an instant entre to corporate America for Nokia. Meanwhile, Motorola's linked on equally questionable grounds. Motorola could be involved as a spoiling tactic to make sure Nokia doesn't get Palm, or it may be seen to be proactive to ease corporate concerns and threats from the likes of 71 year old corporate raider Carl Icahn who has been circling Motorola asking for a seat on the board and demanding the company do something meaningful with its cash reserves. It is also being suggested that Motorola might actually like to own the Treo in order to improve its business oriented feature set. The final point being the only reasonable justification for spending US$2 billion when corporate raiders are banging at the front gates. While there seems little justification, or point, in getting private equity involved, such a move could save Palm from the constant glare of Wall Street analysts, but there seems little point other than to ready the company for a sell off, which it is rumoured to be trying to do now anyway. And when you consider the machinations Palm and PalmSource have already been through in the past years, it seems unlikely a break up of the company is in the offing (again). Related news items Hybrid Drive Boosts Laptop's Skillset -10/10/2007 The Poor Man's Palm -02/10/2007 Palm Goes Consumer With Treo 500v -12/09/2007 Vodafone UK Promises All-You-Can-Hear Music -12/09/2007 Palm Deletes Foleo Folly -05/09/2007 Newer news items Intel Moves To Ease OLPC Conscience -16/07/2007 Changing Fortunes For Smartphone Makers -03/07/2007 Motorola Conquers Everest -23/05/2007 New Motorola Phones Announced -15/05/2007 Microsoft Reports Record Profit -29/04/2007 Older news items Nokia Hopes To Nix Qualcomm Patents -20/03/2007 Huawei CDMA Revenues Grow 30% -13/03/2007 Palm Shares A Roller Coaster -05/03/2007 Billion Phone Goal Missed By A RAZR Edge -05/03/2007 Nokia, RIM, Panasonic - In That Order -28/02/2007 Tag This Now: