Well, they found a buyer, after all.
Hewlett-Packard (HPQ) announced a few minutes ago a deal to acquire Palm (PALM) for $1.2 billion or $5.70 a share in cash. The purchase price includes the assumption of Palm’s debt.
The move is clearly designed to jump-start HP’s barely existent position in the smart phone market. Despite all of the speculation about other buyers – HTC, say, or Lenovo – Palm has fallen into the hands of what was probably the most logical buyer in the first place. The question now: can HP use its heft to turn Palm’s primary asset – the WebOS software – into the kind of success that proved elusive to Palm as a stand-alone company.
While Palm found a rescuer, it would be hard to consider this a happy ending; note that the company as recently as September completed a secondary stock offer at $16.25 a share.
The deal is expected to close in HP’s July quarter.
Current Palm CEO Jon Rubinstein will stay with the company.
Update: Does the Street see another bidder coming? Palm in late trading is up $1.26, or 27.2%, to $5.89 – exceeding the deal price. Meanwhile, HPQ is down 53 cents, or 1%, to $52.75.
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