Company News: Palm buyout speculation increases
Speculation of a buyout of Palm Inc. heightened Tuesday after an industry online publication reported a deal could occur this week.
The Sunnyvale, Calif.-based maker of Treo smart phones and handheld computers hired investment banker Morgan Stanley a few weeks ago to explore its strategic options, including a possible sale, according to a person familiar with the situation.
Now, according to Unstrung.com, Morgan Stanley wants to close a deal by the time Palm releases its fiscal third-quarter results Thursday. Citing unnamed sources, the business news Web site focusing on the wireless communications industry said the potential buyers included cell phone makers Nokia Corp. and Motorola Inc., and private equity firms Texas Pacific Group and Silver Lake Partners.
Representatives of Morgan Stanley, Motorola, Texas Pacific Group and Silver Lake Partners all declined to comment on the report. Nokia did not immediately return a phone call seeking comment.
Marlene Somsak, a spokeswoman for Palm, also wouldn’t comment on the report except to reiterate that the company “is focused on growing its business.”
Nokia, the world’s largest handset provider, is a leading candidate to buy Palm, pondering a bid of $19 per share to $20 per share, but Motorola, the No. 2 handset maker, may try to outbid its Finnish rival, Unstrung.com reported.
Palm’s management, however, is leaning toward selling to a private equity investor, the site said.
With $1.58 billion in sales in its fiscal 2006, Palm has seen its shares surge more than 33 percent this year amid the takeover speculation. The handheld computing pioneer has a loyal customer base and is profitable but faces a growing list of powerful rivals, which will soon include Apple Inc.
“The chairman and chief executive of struggling movie-rental company Blockbuster Inc. got the company’s board to give him a slightly bigger bonus for 2006, but not without agreeing to give up his job.
John Antioco, who has been the CEO for nearly a decade, will leave the company by the end of the year, Blockbuster announced Tuesday. Shares closed down 25 cents, or 3.5 percent, to $6.86 in trading on the New York Stock Exchange, then lost another 6 cents in after-hours trading.
Antioco has repeatedly clashed with billionaire investor Carl Icahn, who is on the board and holds about 10 percent of Blockbuster’s stock. Icahn acquired a large stake in the company two years ago and has been pushing for change.