Sunday 16 May 2010

Palm Was Courted by 5 Companies in Bidding War    [ 16-05-2010 02:39 ]

Author: Serge Novikov   Source: Engadget     Translation by: Paul Smith     

The whole 'HP buys Palm' scenario may be a done deal, but that doesn't mean that there isn't more of the story to tell and that story now appears to be slowly trickling out. Perhaps the most unsurprising aspect to the story is that there were a number of companies other than HP looking at a potential deal with Palm, a total of 16 seperate companies in fact. However, that number can be whittled down to just 5 when we look at 'serious bids' and serious would seem a very apt word to use when you discover that HP's bid won by just $0.20/share more than their nearest rival.

The story in a nutshell is that Palm saw the writing was on the wall back in February before they announced their quarterly results, which were disappointing to say the least. A committee was setup to look at ways to help the company wit all options being considered right up to, and including, selling Palm to the highest bidder, which is what eventually happened of course. Five companies tendered offers to Palm, but frustratingly only HP is named, the others are referred to as Company A, etc. Company D appears to have dropped out of the race early on, whilst Company C wanted to buy Palm's patents. Companies A and B as well as HP were the most interesting bidders according to Palm.

It eventually all boiled down to a match between HP and Company C after offers from A and B had been rejected by Palm. Company C offered $6-$7 a share, but later rescinded that offer to $5.50/share and included various provisions in the offer that started to concern Palm, provisions like a $60 million penalty should the deal not go ahead, for example. Palm went back to HP and Jon Rubenstein, Palm's CEO, told HP that it had to 'significantly' increase its offer if it wanted to stay in the race. HP came back with an offer of $5.70/share and those extra 20 cents clinched the deal

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