PALO ALTO, California - Palm, a pioneer in the smart phone business
that couldn't quite make the comeback it needed, has agreed to be
bought out by Hewlett-Packard for about $1 billion in cash.
The companies announced yesterday that the deal will see HP pay US$5.70
for every Palm common share. Palm had closed trading Wednesday at $4.63
but traded as high as $18.09 in the past 52 weeks.
When debt is included, the deal values Palm at $1.2 billion.
The transaction is expected to close by the end of July.
Last year Palm unveiled a stylish touch-screen phone, the Pre, that was
well reviewed but didn't ring up many sales.
Palm struggled to stand out in a market dominated by Apple and
BlackBerry maker Research in Motion.
But HP said Palm's webOS operating system, which runs the Pre and the
similar Pixi phone, will help it participate more aggressively in the
fast-growing market for internet-connected mobile devices.
It
also said Palm's current chairman and CEO, former Apple executive Jon
Rubinstein, is expected to remain with the company.
Donna Dubinsky and Jeff Hawkins founded Palm in 1992, and in 1995 it was
bought by US Robotics, a modem maker that itself was bought by 3Com in
1997. Palm spun off again as its own company in 2000.
- AP