Company News: Shareholders OK sale of struggling Palm Inc.
As expected, shareholders of struggling Palm Inc. approved Wednesday the partial sale of the company to a private equity firm and a change in the board’s makeup.
The proposed changes, designed to infuse new leadership and help the maker of Treo smart phones regain its reputation for innovative products, were announced in June.
Under the capital restructuring, Elevation Partners will pay $325 million in cash for a 25 percent stake in the company, and Palm will pay a special distribution of $9 per share, or about $940 million in cash, to shareholders for their reduction in ownership.
Palm will also get a new executive board chair — Jonathan Rubinstein, former head of Apple Inc.’s iPod division — after the deal closes.
“NTP Inc., the patent-owning entity that got $612 million out of a suit against BlackBerry maker Research in Motion Ltd., has hit the nation’s top four wireless carriers with similar lawsuits.
The cases, filed last Friday in the federal district court in Richmond, contend that the carriers infringe on eight patents related to wireless e-mail that were granted between 1995 and 2001 to Thomas Campana, whose inventions became NTP’s portfolio. The defendants are AT&T Inc., Deutsche Telekom AG’s T-Mobile USA, Sprint Nextel Corp. and Verizon Wireless, a joint venture of Verizon Communications Inc. and Vodafone Group PLC.
Five of the eight patents were also at issue in the RIM case.
“Electronic Data Systems Corp. said Wednesday it has offered extra retirement benefits to about 12,000 U.S. employees if they will leave the technology-outsourcing company.
EDS expects the offer to result in a charge against fourth-quarter earnings of $70 million to $130 million, the company said in a filing with the Securities and Exchange Commission.
“The head of Ford Motor Co.’s European operations said Wednesday it’s too soon to say if Ford would keep a stake in its Jaguar and Land Rover units, but a full sale is what the cash-hungry automaker wants.
“We’re selling the business because we need the money and we need the focus,” Lewis Booth, executive vice president of Ford’s European units, said during a webcast from the Frankfurt auto show.
The automaker lost $12.6 billion in 2006 and has said it expects to burn up to $15 billion to $16 billion in cash before returning to profitability in 2009.