Suitors circle Palm as buyout expected this week
Nokia and up to three other potential bidders are interested in buying Palm, which could be sold for some $2 billion as early as this week, a technology news website said.
Unstrung.com quoted unidentified sources close to the situation as saying Palm’s management preferred a private equity buyer. It speculated that Texas Pacific Group and Silver Lake Partners were among the private equity firms interested.
Another bidder for Palm, which makes the Treo smartphone and other handheld digital devices, may be Motorola, the site said.
Shares of Palm, which have vaulted more than 33 per cent this year on takeover rumors, rose 5 per cent to $19.10 on Tuesday. Unstrung said the company would likely sell for more than $20 a share. It had 102 million shares outstanding as of December.
Sources have previously told Reuters that Palm hired Morgan Stanley to pursue a buyer. Unstrung said that Morgan Stanley wanted to wrap up a deal by Thursday, when Palm is scheduled to report quarterly results.
Texas Pacific, Nokia and Motorola representatives declined comment. Silver Lake was not immediately available for comment.
‘We make it a practice not to comment on rumors or speculation. We are focused on growing our business,’ said a spokeswoman for Palm.
Palm has long been tossed around as a target, thanks to its popular Treo line of smartphones that hold thousands of personal contacts and appointments, as well as surf the Web and send e-mails.
Analysts, however, have said that the recent run-up in Palm shares may make potential buyers shy away.
An analyst in Helsinki said a bid from Nokia was unlikely.
‘Likely buyer is a company which does not have strong offering of Palm-like products. Nokia does have an improving, good lineup,’ said Evli bank analyst Ilkka Rauvola.
Nokia rolled out its E-series phones, aiming for corporate customers, last year and introduced several new models last month at the 3GSM trade show in Barcelona.
Shares of Sunnyvale, California-based Palm were up 87 cents at $19.01, after hitting a session high of $19.1 in early trading on the Nasdaq.