Palm Acquisition May Be Announced in Two Days

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Rumors have been circulating for weeks that Palm, Inc. is going to be bought by another company, and supposedly a deal could be announced as early as this Thursday.

PalmSupposedly, Palm has been working with Morgan Stanley to hand this deal, and the banker reportedly want to be able to make an announcement on March 22, when Palm releases the results of its most recent financial quarter.

The source of these unconfirmed reports is Unstrung, the web site that also has been the source for all the other rumors of a Palm buyout.

A Bidding War

There are supposed to be up to four companies bidding on the handheld and smartphone maker.

One of these is Nokia, who is reportedly Morgan Stanley’s favorite in the auction.Palm’s management, on the other hand, would prefer the company be sold to a private equity firm, two of which are supposedly taking part in the bidding..

A dark horse candidate in this might be Motorola. It was reported earlier that this company had dropped out of the auction, but there are suggestions it’s back in.

If Palm is acquired by a private equity firm, it might have some high-level managers replaced, but would likely continue on virtually unchanged, aside from the having greater access to cash for research and development. If it is bought by another smartphone maker like Nokia or Motorola, changes could be more profound.

Pushing Up the Stock Price

Palm’s management has confirmed none of this information, and this company has a policy of not commenting on rumors.

Nevertheless, enough people believe this rumor that Palm’s stock price has jumped considerably in recent weeks. It is now selling for around $19, while it started this year around $14. According to the rumor, whichever company buys Palm is expected to pay about $20 per share.

 

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