Contrary to rumors about Levono buying Palm, it was announced today that HP will purchase the struggling cell phone provider.
HP and Palm, Inc. (NASDAQ: PALM) today announced that they have entered into a definitive agreement under which HP will purchase Palm, a provider of smartphones powered by the Palm webOS mobile operating system, at a price of $5.70 per share of Palm common stock in cash or an enterprise value of approximately $1.2 billion. The transaction has been approved by the HP and Palm boards of directors.
The combination of HPs global scale and financial strength with Palms unparalleled webOS platform will enhance HPs ability to participate more aggressively in the fast-growing, highly profitable smartphone and connected mobile device markets. Palms unique webOS will allow HP to take advantage of features such as true multitasking and always up-to-date information sharing across applications.
“Palms innovative operating system provides an ideal platform to expand HPs mobility strategy and create a unique HP experience spanning multiple mobile connected devices,” said Todd Bradley, executive vice president, Personal Systems Group, HP. “And, Palm possesses significant IP assets and has a highly skilled team. The smartphone market is large, profitable and rapidly growing, and companies that can provide an integrated device and experience command a higher share. Advances in mobility are offering significant opportunities, and HP intends to be a leader in this market.”
“Were thrilled by HPs vote of confidence in Palms technological leadership, which delivered Palm webOS and iconic products such as the Palm Pre. HPs longstanding culture of innovation, scale and global operating resources make it the perfect partner to rapidly accelerate the growth of webOS,” said Jon Rubinstein, chairman and chief executive officer, Palm. “We look forward to working with HP to continue to deliver industry-leading mobile experiences to our customers and business partners.”
Under the terms of the merger agreement, Palm stockholders will receive $5.70 in cash for each share of Palm common stock that they hold at the closing of the merger. The merger consideration takes into account the updated guidance and other financial information being released by Palm this afternoon. The acquisition is subject to customary closing conditions, including the receipt of domestic and foreign regulatory approvals and the approval of Palms stockholders. The transaction is expected to close during HPs third fiscal quarter ending July 31, 2010.
Palms current chairman and CEO, Jon Rubinstein, is expected to remain with the company.