Good insights on why Palm and Motorola fit together.
Having noted that, however, I think Jake's thoughts on MOT share price falling upon Palm acquisition might be spot on, especially at a $25/share price. Meanwhile Nokia shares are going up as MOT becomes the likely bidding winner...
Palm Takeover Speculation Heats Up Ahead Of Earnings Report
DOW JONES NEWSWIRES
March 21, 2007 11:59 a.m.
By Roger Cheng
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Speculation is heating up that Palm Inc. (PALM) may unveil a deal to be taken over ahead of its quarterly earnings report slated for Thursday after the closing bell.
Palm shares recently rose 2.7% to $19.28.
Rumors over Palm's acquisition have surrounded the company since the beginning of the year, rehabilitating a stock that hit a year-low in December. Most recently, an unnamed Palm shareholder told CNBC Wednesday that he expected Motorola Inc. (MOT) and Palm to announce a deal before Palm reports its results.
Spokesmen for Palm and Motorola each declined to comment on the speculation.
Motorola recently fell 2.1% to $18.43.
The shareholder told CNBC that Motorola could pay as much as $25 a share, and that the deal would immediately add to earnings given Palm's cash flow.
For Motorola, Palm would give the company a recognized and trusted brand in smartphones, an area in which the world's No. 2 handset maker has struggled in. The companies use compatible wireless technology and mobile operating system. They also have similarly strong relationships with the U.S. carriers.
On Tuesday, Motorola said its chief executive, Ed Zander, was pulling out of his keynote speech at next week's CTIA Wireless trade show, further fueling the speculation.
Another possible bidder is Nokia Corp. (NOK). But a deal with the world's largest handset maker is complicated by differing technology and the use of rival operating system. Nokia recently rose 0.7% to $22.29.
Also in the mix are two private equity firms, both of which would value Palm for its cash flow.
Palm's total current liabilities are $488.9 million, and it has $518.4 million in cash, cash equivalents and short-term investments, through its fiscal second quarter ended Nov. 30.
-By Roger Cheng, Dow Jones Newswires; 201-938-2020; roger.cheng@dowjones.com
online.wsj.com |
