On HP's Palm acquisition, bidding war details unfolded

By on May 17, 2010, 7:58 AM
In a surprising move, HP announced last month they were acquiring handset maker Palm for $1.2 billion. But before that took place rumors circulated that HTC and Lenovo were two prominent interested parties, while Palm had endured limited success with their webOS devices and looked for a financial exit.

In the end, the HP acquisition made more sense and you could also say makes for a far more exciting prospect, having one of the most resourceful IT companies entering the smartphone market in full force. That much we knew until today, however Palm has revealed additional details on their latest statement to shareholders. As it turns out, a bidding war took place for about a month before HP won Palm over offering a 23% premium on their stock, a mere 20 cents per share above the next highest bidder.

The SEC filing mentions that 16 companies were in contact with Palm's management for potential bids, but only five made offers that consisted of a takeover or IP licensing agreements for webOS that would have resulted in additional income to maintain the company afloat. The other bidder names are not disclosed and are only referred to as Company A, B, C and D. After going back and forth with some of these companies, a very close race between HP and "Company C" was set in stage and had Palm CEO Jon Rubinstein working day in and day out until getting a sealed deal.

It'd be interesting to learn who was that company that tried the hardest to take a hold of Palm's assets. Could it be Dell, or Lenovo? Perhaps we will find out sooner rather than later.




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