Palm Closes Elevation Deal, $325 Million For 25 Percent Stake; Rubinstein New Executive Chairman


Palm (NSDQ: PALM) has closed the sale of 25 percent of its stock to Elevation (which includes Bono as a partner) for $325 million. This was noted back in June, and all the details are the same — including a $9 per share dividend totaling about $950 million paid for with the investment, existing cash and $400 million in new debt. As far as I can tell the dividend is about half the value of a single share, while that share now owns only three-quarters what it once did. There’s some talk from Palm about this transaction laying the groundwork for getting the company back on track, but I think all that it’s really done is transfer some ownership.

There have also been some board appointments: Jon Rubinstein, former senior vice president of hardware engineering and head of the iPod division at Apple, has joined Palm as executive chairman of the board, and Fred Anderson and Roger McNamee, managing directors and co-founders of Elevation, have joined Palm’s board of directors. Rubinstein, Anderson, and McNamee replace Eric Benhamou and Bruce Dunlevie, who resigned from Palm’s board of directors. The total number of directors on the board has been increased from eight to nine in connection with the transaction. (release)

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