Hong Kong: Palm, 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 and Frank Quattrone's Qatalyst Partners to find a buyer, said the people, who declined to be identified because a sale hasn't been announced. Taiwan's HTC Corporation and China's Lenovo Group have looked at the company and may make offers, said the people.
Palm, which helped pioneer the market for personal digital assistants, would offer suitors the WebOS software that competes against mobile operating systems from iPhone maker Apple and Google.
For Elevation Partners, the firm that owns about 30 per cent of Palm, a sale may end the volatility of an investment in a stock that surged more than 10-fold since December 2008 before erasing most gains.
"Palm still has quite a good brand in the US market, and some strong technology, so you can do something with it," said Frank He, a technology analyst at BOC International Holdings 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 per cent last week on the Nasdaq Stock Market on renewed speculation of a takeover bid. Before the rally, the stock had plunged more than 60 per cent this year, dragged down by disappointing sales of the Pre and Pixi phones.
Forecast
Chief Financial Officer Doug Jeffries last month forecast sales in the quarter ending in May will be less than $150 million (Dh550.8 million), compared with the $300 million average of analysts' estimates compiled by Bloomberg at the time.
Palm, which has a market value of $870.8 million, ranked sixth in the North American smartphone market during the three months ended December 31 with a 4.3 per cent share, according to Gartner. Research in Motion, maker of the BlackBerry, led with 44 per cent, followed by Apple's 24 per cent.
Chief Executive Officer Jon Rubinstein, who developed Palm's latest operating system, was counting on the Pre and Pixi smartphones to attract customers. The company has patents from mobile hardware to software and power-saving technologies.
