Palm to sell 25 pct stake to private equity
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- Palm Inc.  said it will sell a 25 percent stake to private equity firm Elevation Partners for $325 million, and use the proceeds along with the cash on hand and new debt to pay $9 in cash to stockholders.
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SUNNYVALE, Calif. -- Smartphone maker Palm Inc. will sell a 25 percent stake to private equity firm Elevation Partners for $325 million, the company said Monday, and announced that the former technical guru behind the iPod will become chairman.
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U.S. investment fund Perry Capital has  offered to buy an additional 25 percent stake in ailing  Japanese chip maker NEC Electronics Corp. (6723.T) for 154  billion yen ($1.27 billion), a source close to the matter said  on Wednesday.
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The Dutch private equity firm will sell the stake in the mobile telephone company to a Dutch investor.
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PalmOne (nasdaq: PLMO - news - people ) report fiscal first-quarter results well above analysts&#39; estimates. The maker of handheld computers reported revenue of $273 million and earnings of 43 cents per share
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Pancake restaurant IHOP Corp.  plans to buy Applebee's International Inc.  for $25.50 per share, the companies said on Monday.
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(InfoWorld) - Palm's troubles continued on Thursday as the company posted a profit of $15.4 million for the fourth quarter, a 44 percent drop from its $27.2 million mark one year earlier, despite strong sales of its Treo smartphone. The company reported revenue of $401.3 million for the quarter ending June 1, down slightly from the $403.1 million it earned in the same quarter in 2006 and also below Wall Street's forecast of $406.6 million, according to analysts polled by Thomson Financial. The results come just weeks after the company faced rumors it would be acquired by rivals MotorolaÂ orÂ Nokia. Instead, Palm raised $325 million of extra money byÂ selling a 25 percent stake of the company Â to private equity investors. Palm is shifting its product portfolio from PDAs to smartphones, which are far more popular and offer a potential for greater profit margin because of their higher price tags. In the past quarter, Palm drew 86 percent of its revenue from smartphone sales, a huge swing for a company that in 1996 drew its entire revenue from the PalmPilot PDA. Palm's smartphone revenue of $344.2 million for the quarter was up 14 percent from the same quarter in 2006. "Our record Treo sell-through reflects strong fundamentals in the core focus areas of our business," said Palm CEO Ed Colligan. "I'm confident that in fiscal year 2008, more and more standard handset customers will demand the capabilities and ease of use of Palm smartphones, which aligns us well for future growth and profitability." Despite Colligan's optimism,Â Palm's smartphone sales did not help its results. Palm earned a profit of $0.15 per share in the fourth quarter, matching analysts' expectation of $0.15 but coming in far below the $0.25 it made a year earlier. Looking into the future, the company predicted revenue between $355 million and $365 million for the coming quarter, the first period of Palm's fiscal 2008. If the company meets the higher end of goal, it would beat its mark of $355.8 million in revenue for the first quarter of 2007. However, Palm may be distracted by change in its boardroom. As a condition of buying a large share of the company, the investment group Elevation Partners insisted on installing a new chairman, former AppleÂ vice president Jon Rubinstein. Palm also raised questions among investors in May when itÂ launched the Foleo, a miniature laptop Â intended to sell as a "smartphone companion." That product quickly faced criticism that its $599 price was too high and that its 10-inch screen was too large. Also on Thursday, Palm reported revenue of $1.56 billion for the full fiscal year 2007, down 1 percent from the $1.58 billion it earned in 2006. Palm earned profit of $56.4 million for the year, far below its $336.2 million profit in 2006, although the 2006 figure included a one-time tax rebate of $219.5 million.
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Swisscom AG  will repurchase a 25 percent stake in Swisscom Mobile from Britain's Vodafone Group Plc for 4.25 billion Swiss francs ($3.5 billion) in a long-awaited deal to fortify its home market position.
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Soon after announcing plans to sell stake in company to venture capital firm, Palm cuts unspecified number of jobs Thursday, CNET News.com has learned.
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Cingular Wireless, the largest United States cellphone service provider, has agreed to sell its 33 percent stake in Idea Cellular of India for about $200 million to a Malaysian joint venture.
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(InfoWorld) - Palm Inc. began taking orders for its Treo 680 smartphone on Wednesday, hoping to expand from its core business customers to a larger market of casual, first-time users. Palm is charging US$399 for the "unlocked" version of the phone, allowing users to subscribe to any carrier, and plans to begin shipping the phones shortly after Dec. 1. One carrier has already announced a plan for the phone -- Cingular Wireless LLC will begin selling the Treo 680 for $199 on Friday. Palm hopes to attract a new demographic by designing the Treo 680 with an internal antenna, making it slimmer than previous models, and offering it in four colors, according to a statement by John Hartnett, Palm's senior vice president of global markets. In another bid for those casual customers, Palm has moved beyond purely business functions, and will offer entertainment applications like the ability to show Flash-based movies such as those seen on the YouTube Web site, and to play MP3 songs through a 30-day trial of Yahoo Inc.'s mobile, digital music service. New users might also appreciate the Google Maps function, which offers personalized driving directions or addresses for nearby restaurants. "Location-based services hold great promise in a wide variety of areas, such as helping friends find each other, helping advertisers more effectively target prospects, and even ensuring that no man ever has to stop for directions again," said Avi Greengart, principal analyst for mobile devices with Current Analysis. As a phone, the Palm OS-based device operates on the GSM (Global System for Mobile Communications), GPRS (General Packet Radio Service) and EDGE (Enhanced Data Rates for GSM Evolution) networks. Palm hopes the Treo 680 will help it to grow beyond its roots in the slow-growing PDA (personal digital assistant) market, and claim a greater share of the burgeoning smartphone industry. Smartphone shipments worldwide grew 75.5 percent to 34.7 million units in the first half of 2006, according to research firm Gartner Inc. In comparison, PDA sales grew only 5.7 percent to 7.4 million units. North America is the only region where PDAs continue to outsell smartphones, so Palm hopes its new product has arrived in U.S. markets in time to catch a wave of people upgrading to the new technology. With only 5 percent of the worldwide market for combined PDA and smartphone markets, Palm needs the Treo 680 to be a financial success in order to compete with its larger rivals. Nokia Corp. is the largest vendor, with 42 percent market share, followed by Research in Motion Ltd. with 6.5 percent and Motorola Inc. with 5.3 percent, according to Gartner. Posting strong sales through the holiday season will be crucial for that plan, as Gartner predicts smartphones sales will continue to rise, totaling 81 million for the full year of 2006. That growth will be fueled by a jump in consumer demand, focused on individual details like fashion and multimedia, according to a statement by Gartner analyst Roberta Cozza. Â
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Smartphone maker Palm Inc. is consulting with investment bankers on its strategic options, including the prospect of selling the company, seeking investment from venture capitalists, or making an acquisition of its own, according to a report in the The Wall Street Journal.
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(InfoWorld) - Recent reports that Nokia is in talks to buy Palm surprise some analysts, who nonetheless said some type of buyout might make sense and could even be a good thing for customers. According to news reports, the pioneering handset maker has been talking with possible suitors, and Nokia has emerged as the frontrunner for an acquisition, though investors might simply take the company private. Earlier reports said Motorola wanted to buy Palm. Palm is profitable and increasing sales but faces tough competition and has stumbled recently. It has sold fewer devices than analysts expected in recent quarters, in part because of delays in getting products out, said Casey Ryan of Nollenberger Capital Partners in San Francisco. New products from Research In Motion and other rivals have also eaten into Palm's market share, Ryan said. The whole high-end phone category is drawing many new entrants with flashy devices, including Apple with its iPhone. Palm was instrumental in creating the market for PDAsÂ in the 1990s but has moved with the rest of the handheld business to devices that can also be used as phones. Its Treo smartphones, which come with either the Palm OS or the MicrosoftÂ Windows Mobile platform, are now Palm's bread and butter. A Palm purchase by Nokia would mark a sharp turn for the Finnish cell-phone giant, analysts said. Nokia is focused on the OS developed by Symbian, of which it is a major owner, and its own operating systems, Needham's Ryan said. Although it has had trouble selling its high-end phones in some areas outside Europe, such as the U.S., Nokia has always insisted its operating systems were better than the competition's. Bringing the Palm and Microsoft platforms into its lineup would be like Apple's chief Steve Jobs unveiling a Windows PC, he said. "To me, it would seem to be a very challenging press conference," Ryan said. Even if Nokia swallowed hard and admitted it needed Palm OS and Windows Mobile, the company would be faced with steep hurdles in corporate integration, he added. A private buyout would make more sense, the analysts said. Palm is a basically sound company in a growing industry and could appreciate strongly over the next few years, according to Ryan. A reported price of $20 per share seems reasonable, he said. On Thursday, Palm's shares (PALM) closed at $16.49, down $0.06. Private investors could turn out to be heroes to Palm OS users, according to Greengart. They could shield Palm from the harsh glare of quarterly earnings expectations, possibly freeing management to make the big investment required to bring Palm OS up to date, he added. Despite several changes in direction and ownership over the past few years, the software has remained largely the same except for the addition of video capability, he said.
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Treo smartphone maker Palm Inc.  said on Monday it will sell a 25 percent stake to private equity firm Elevation Partners for $325 million, in a deal that adds a former Apple Inc. executive to its board.
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(InfoWorld) - AfterÂ canceling its controversial FoleoÂ product and continuing to struggle with a shift away from the personal digital assistant market, Palm warned on Wednesday that its upcoming earnings report could be weaker than expected. For the quarter ending Aug. 31, Palm will lose $0.01 per share or break even, the company said. Earlier, the company had said it expected a loss of $0.01 or a gain of $0.01 in the period. That compares with a gain of $0.35 per share in the same quarter last year. Palm also narrowed its revenue forecast to between $359 million and $361 million, instead of the previously expected $355 million to $365 million. Palm will release its quarterly earnings report on Oct. 1. The company is facing challenges as it changes its business from one focused on PDAs to one that specializes in smart phones. Earlier this month, Palm announced it wouldn't ship the Foleo, a companion product to itsÂ Treo smart phone, as planned. When the device was announced, analysts said it would be too expensive and wouldn't offer valuable features. Palm said it decided to focus instead on its own software platform that is due out in 2008 or 2009.
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Platinum Equity will acquire Covad Communications for about $304 million, making the communications services company the latest technology company to sell to a private equity firm.Platinum will pay $1.02 in cash per share for Covad, a 59 percent premium over Covad&#39;s closing price Friday on the American Stock Exchange, the companies announced Sunday. The acquisition is expected to close by the end of the second quarter of 2008.San Jose, Calif.-based Covad provides voice and data services such as VoIP (Voice over Internet Protocol) and DSL (Digital Subscriber Line) to businesses, specifically small and medium-sized enterprises (SMEs).In June,&#160;Covad cut 8 percent of its staff&#160;as part of a restructuring that also saw the company take a $1.5 million charge for Q2 2007.It is due to report third quarter results Tuesday. The company reported a loss of $11.6 million for the second quarter of this year.Private equity firms have been particularly active in acquiring technology companies this year. TPG Capital and Goldman Sachs&#160;bought Alltel&#160;in May for $27.5 billion, with TPG and Silver Lake Partners&#160;snapping up Avaya&#160;for $8.2 billion just a few weeks later.&#160;
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Oracle Corp. Friday said 61 percent of PeopleSoft Inc. shares were tendered for its $24-a-share offer, strengthening Oracle&#39;s hostile bid position as it waits to