Palm Inc, creator of the Pre smartphone, is seeking bids for the company as early as this week, according to three people familiar with the situation.
The company is working with Goldman Sachs Group Inc and Frank Quattrone’s Qatalyst Partners to find a buyer, said the sources, who declined to be identified as a sale had not been announced.
Taiwan’s HTC Corp (宏達電) and China’s Lenovo Group Ltd (聯想) have looked at the company and may make offers, they said.
Palm, a pioneer in the personal digital assistant market, would offer buyers the WebOS software that competes against mobile operating systems from iPhone maker Apple Inc and Google Inc.
As for Elevation Partners LP, the firm that owns about 30 percent of Palm, a sale may end the volatility of an investment in a stock that has surged more than 10-fold since December 2008 before erasing most of the gain.
“Palm still has quite a good brand in the US market and some good technology, so you can do something with it,” said Frank He (何方), a technology analyst at BOC International Holdings Ltd (中銀國際) in Hong Kong. “The shares have gone down a lot and the company may become attractive to anyone looking for a turnaround play.”
The Sunnyvale, California-based device maker surged 32 percent last week on the NASDAQ on renewed speculation of a takeover bid. Before the rally, the stock had plunged more than 60 percent this year, dragged down by disappointing sales of the Pre and Pixi phones.
Chief financial officer Doug Jeffries said last month that forecast sales in the quarter ending in May would be less than US$150 million, compared with the US$300 million average of analysts’ estimates compiled by Bloomberg at the time.
Palm, which has a market value of US$870.8 million, ranked sixth in the North American smartphone market during the three months ending Dec. 31, with a 4.3 percent share, Gartner Inc said.
Research in Motion Ltd, maker of the BlackBerry, led with 44 percent, followed by Apple’s 24 percent, Gartner said.
Dell Inc also looked at Palm, though it decided against an offer, two of the sources said.
Unlisted Huawei Technologies Co (華為技術) and ZTE Corp (中興通訊), China’s two biggest makers of phone equipment, may be more likely bidders for Palm than HTC or Lenovo, said Lu Chia-lin (呂家霖), a technology analyst at Macquarie Group Ltd. in Taipei.
Chinese firms “have been quite eager to expand their international markets,” Lu said.
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