Sale not the only option - Palm exploring licensing, fundraising; Cisco a potential buyer 89
The shocker headline from late last night was that Palm was up putting itself up for sale. According to Bloomberg, Palm enlisted the help of Goldman Sachs and Qatalyst Partners in the quest to find a buyer. If you fear what could come of Palm should they be purchased, Reuters is here to assuage your fears. According to Reuters’ source, Palm’s retaining of the two banks (Qatalyst focuses on technology investments) is not just to arrange a sale. Palm is apparently exploring all options, as we would hope they would.
On the same table as “sell” are at least two other options: seeking additional capital investments (such as the hundreds of millions of dollars injected into Palm by Elevation Partners) and licensing the webOS operating system. Either would allow Palm to remain a standalone company, though if you had to ask us, extra money stands a better chance of success than licensing webOS. The smartphone marketplace is incredibly crowded and Google’s Android OS has snapped up licensees left and right. The smartphone marketplace is growing increasingly crowded, and as much trouble as Palm has had convincing customers to buy their phones, we can see even greater difficulties in getting manufacturers to pick up webOS.
Meanwhile, StreetInsider.com is reporting that Canaccord Adams' analysts expect that if Palm is purchased, it will be taken in at below market value (a proposition we find laughable). According to the analysts, four potential buyers have submitted bids between $1 billion and $2 billion (Palm's market cap stands at a hair over $1 billion). Only three of the potential suitors have apparently made it to the second round of bidding: HTC, Lenovo, and Cisco (surprise!). Yeah, Cisco, the company known to laypersons as the guys that make routers and big video conference rigs only presidents and CEOs can afford.
Palm’s stock rallied hard on the NASDAQ today, ending trading up 17.05%, closing the day at $6.04. Shares of Palm have risen nearly 57% since last Wednesday when the first serious rumors of a buyout surfaced.
Thanks to Mikeh20 and Markus for the tips!