Investing in Palm: Thursday Buyout?
By Ian Cooper
Weeks ago, we reported that Palm hired Morgan Stanley to evaluate strategic alternatives, which could include the possible sale of the company. There’s really no mystery as to why some one would want to buy Palm. This is a company with $518 million in cash with strong cash flows.
That sale could come as soon as Thursday, according to Unstrung.com, with a price tag of about $20 a share. That’d be a 10% premium to Monday’s closing price. Morgan Stanley, according to reports, wants a done deal by March 22, 2007 (Thursday).
While the Nokia name is being tossed around as a potential buyer, I don’t know how much I’d bet on that. In our opinion, there’s a slim chance that Nokia would buy Palm (considering that both use different operating platforms). And not even Nokia may be a likely buyer. They, too, use a different operating system than the one Palm uses. Other interested buyers may include private equity heavyweights like Texas Pacific Group and Silver Lake Partners.
It’s a wait and see at this point. Stay tuned.
Take care,
Ian L. Cooper, Editor, Early Alert Trader
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