Palm On The Auction Block

Rumors have been flying this week that Palm is on the auction block — apparently started by a story in Unstrung.com. It quoted “sources close to the situation” as saying that banker Morgan Stanley is working on behalf of Palm to get the company sold by the 22nd, the day that Palm is due to report its results for the third quarter of the 2007 fiscal year. As well as a couple of private equity groups (Texas Pacific Group and Silver Lake Partners are mentioned) both Nokia and Motorola are reportedy considering a bid on the PDA/smartphone maker, with the price set at $20 per share or more.
According to pundits Nokia wants Palm as an entrance into the US market, although other analysts have noted that Nokia already has similar products to Palm. Also, a fair bit of Palms business is CDMA, something Nokia isn’t big on.
Motorola is seen as a possible buyer in order to improve its offerings in the high-end handset market, with the NYT noting that the last minute cancellation of a speech at CTIA by Motorola chief executive Edward Zander is fuelling speculation that the move was so he could concentrate on a bid for Palm. It has also been suggested a bid could be a way to calm the ambitions of activist investor Carl Icahn.
Unstrung has some responses to its original story.

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