Andre Yoskowitz
16 May 2010 23:05
In late April, HP announced it was purchasing the struggling smartphone maker Palm for $1.2 billion, and it appears that HP was not the only interested party, with at least four other companies giving serious bids.
Palm put itself up for sale in the last two months after it became clear that the company's phones were not selling and it only had enough cash to last the next 12 months.
The smartphone maker then reached out to 16 different companies and five gave serious offers. Only HP and Lenovo were named as potential buyers, while two other companies wanted to license Palm's patents, including the mobile operating system WebOS.
HP's first offer was for $1 billion ($4.75 a share), while an unnamed company offered $600 million in cash. The third would-be buyer offered an all-stock transaction. Palm told all three the bids were not competitive and suddenly a fourth company came out and offered $6 per share, as well as the promise that the transaction would happen in the next two weeks.
This move led HP to increase their offer to $5 per share, while the other company dropped their bid to $5.50. HP finally raised its bid to $5.70 per share, and the merger was announced a few days later.