Palm Buyout Likely This Week - Sources

According to a report published Monday on tech-news website Unstrung (which is connected with the communications news site Light Reading), a Palm Inc. buyout could be finalized by Thursday, at a price of $20 or more per share, according to sources close to the situation. Nokia Corp. is the leading vendor bidder, but Palm management is said to favor a private equity buyer -- either Texas Pacific Group or Silver Lake Partners. Motorola Inc., the sources say, has been reconsidering its position, and may try to block Nokia with its own bid in an effort to get out of its low-price war with Nokia and concentrate on Palm's higher-end Treo 680, and in order to placate activist shareholder Carl Icahn who has been pushing for a seat on Motorola's board. Morgan Stanley, which was hired by Palm to explore its options, wants a deal closed by March 22, the day Palm is due to report its FQ3 2007 earnings, the sources say. In Monday trading, Palm shares closed up 1.8% to $18.14 and were up another 1.5% in after-hours trading, Nokia shares were up 1.42% to $22.16, and Motorola shares closed up 0.55% to $18.29.

Sources: Unstrung
Commentary: Palm: Sale Seems Unlikely • Are Palm's Days Numbered? • Palm As a Buyout Target: Suitors Abound
Stocks/ETFs to watch: Palm Inc. (PALM), Nokia Corp. (NOK), Motorola Inc. (MOT). Competitors: Research In Motion Ltd. (RIMM), Apple Computer Inc. (AAPL). ETFs: streetTRACKS Morgan Stanley Technology Index Fund (MTK), HOLDRS Wireless (WMH), HOLDRS Broadband (BDH)
Related: Light Reading
Conference call transcripts: Palm F2Q07 (Qtr End 12/1/06) Earnings Call Transcript • Nokia Q4 2006 Earnings Call Transcript • Motorola Q4 2006 Earnings Call Transcript

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