HP bought Palm after a five-company bidding war

Palm and HP seem like the happiest of corporate couples right now, but theirs was a heated courtship: according to Palm's latest statement to shareholders, a total of 16 companies were contacted about a deal, and HP was the winner of a month-long bidding war that involved serious offers from five companies -- a bidding war that involved Jon Rubinstein personally warning HP that it had to "significantly and immediately" increase its offer to remain in the game. What's more, HP's winning bid came in at just 20 cents a share more than its primary rival. Yeah, it's juicy -- read on for the full blow-by-blow.

• Palm recognized that it was in trouble in early February, a few weeks before it posted its disappointing quarterly results, and on February 17 the company organized a committee headed by CEO Jon Rubinstein investigate its options -- everything from licensing webOS to selling the company was on the table.
• From February 25 to April 1, Palm's management and consultants talked to a total of 16 companies about doing a deal. Five companies including HP ultimately got to the point of making offers, but only HP is publicly named in the filing -- the other suitors are referred to as Companies A, B, C, and D. Palm was most interested in HP and Companies A and B, while C and D initially only wanted to acquire Palm's patents. It's not clear when D dropped out.
• Palm's board of directors decided that selling the company was the best option in early March. The board thought about selling patents and / or licensing webOS, but decided against it because licensing would dilute the value of Palm's IP and fail to address long-term problems like scale and resources, and management was told to tell potential buyers that they should focus on an "outright acquisition." If you're keeping track, that's the exact opposite of what Jon Rubinstein was saying on April 22.
• HP made its first offer on April 13, for for $4.75, or about a billion dollars, and requested a 30-day period of exclusive negotations. Company A followed up on April 15 with an offer of $600 million in cash, and Company B proposed a stock-for-stock deal that would take longer than the other deals.
• After receiving the offers from A and B, Palm told HP that it wouldn't give it an exclusivity period unless it improved its offer, and HP declined. At the same time, Palm decided that neither A Nor B's proposal were of any value to its shareholders, and told both companies that they weren't competitive. A and B then dropped out of the game.
• On April 18 Company C offered between $6 and $7 per share with a proposed transaction to take place within 14 days, and on April 19 Palm sent both HP and Company C draft merger agreements.
• Palm and HP senior management held meetings on April 20 and 21, resulting in HP upping its offer to $5 per share on April 22. Later that day, Company C dropped its offer to $5.50 and sent Palm a revised merger agreement that contained several worrisome provisions, including a longer, riskier transaction timeline and a $60 million penalty if the deal didn't go through. Palm and Company C engaged in "extensive negotiations" from the 23rd to the 25th, but never managed to work out a compromise.
• While that was going on, on April 24th Jon Rubinstein and his advisors directly told HP that its offer wasn't competitive and that it had to "significantly and immediately" improve its offer in order to remain in the game. HP responded by raising its offer to $5.70 per share (the winning bid) later that day, and Jon Rubinstein told Company C that he had a better offer on April 25th.
• Company C told Palm it wasn't raising its acquisition offer, but offered to buy patents and take a nonexclusive license to webOS for $800 million. The board considered that proposal on the same day and declined.
• From that point on it was all HP -- the two companies negotiated from April 24 to April 28, when the merger was approved by Palm's outside accountants at Goldman Sachs and announced to the world.

Yeah, it's a crazy story, and it gets even wilder: Palm says Company C never signed an NDA, so it's more than likely we'll eventually find out who it was. Your guess is as good as ours -- Lenovo? ZTE? Dell? Either way, it looks like HP pulled this off in the nick of time.

Meet H/Pre

Adding even more drama to an pivotal and transformative year in tech, last week HP announced it will buy Palm for the nice round sum of 1.2 billion dollars -- a move that will position it as a major player in the crowded mobile market. HP is no stranger to mobility -- the iPaq was once a defining mobile product -- but over the years the company has been unable to replicate that success with similar efforts in as the dynamic shifted from PDAs to phones. Buying Palm is a quick way of getting back in the game.

Palm takes its last breath alone as HP swoops in & buys them

At long last the time has finally arrived after months of speculation surrounding the fate of the one time great smartphone manufacturing company that saw itself at the forefront mobile technology. Of all the companies thrown into the pot considering on buying Palm the last couple of months, it certainly came to a surprise that we didn't have to look far as HP got themselves a warm portion of the pie. Yes, the world's dominant PC manufacturer came out of nowhere and bought their long time rival.

After being courted by companies like Lenovo, HTC, and even Huawei, there was no denying that Palm was spiraling downwards faster despite the fact that Palm CEO Jon Rubinstein insisted that the company could survive on its own. The acquisition of Palm surely came in at a minimum cost for the dominant company who is undoubtedly at the top of their game. Buying Palm for a mere $1.2 billion, some would consider HP making out big time on the purchase considering that Palm's stock was once valued close to $14 per share over a year ago. Under the terms of the merger agreement, current Palm shareholders will be given $5.70 for each share. Although there are some talks right now regarding the future of Palm, Jon Rubinstein looks to stay put with the company while the deal is expected to finally close by July 31.

Almost instantly, HP is catapulted into the limelight and their presence will undoubtedly be felt far and wide as they quickly acquire all of Palm's assets – which includes their patent portfolio, device hardware, and webOS. So the question left answered is what HP intends to do now that they've acquired the venerable smartphone maker? Whichever road they choose to go, we're sure that HP will utilize the technology that Palm has built up from the ground up and integrate it in a medley of devices ranging from smartphones, tablets, computers, and everything else in between.

Palm's expertise in touchscreen technology and webOS could become useful for HP as they plan to compete on a grand scale among the premier cell phone manufacturers out there. It's almost ironic looking back earlier in the decade when HP was one of the companies to back Microsoft's Pocket PC platform in the hopes of being a clear competitor to Palm's reign in the PDA market. Ultimately, HP is definitely reinventing themselves with this and we look forward to see how they will be able to translate this purchase into a profitable reign for them.

PALM PRE PLUS AND PALM PIXI LUS PICTURES

Here are some pictures of the Palm Pre Plus and the Palm Pixi Plus at CTIA 2010. Enjoy!

About Palm Pre Plus: The Pre Plus is almost identical to the to the Palm Pre in terms of specifications and design. The differences between the two are that the Pre Plus has double the storage capacity with its 16GB memory and lacks the button on the front.

About Palm Pixi Plus: The Pixi Plus is almost identical to the Palm Pixi in terms of specifications and design. The difference between the two is that the Pixi Plus has Wi-Fi.

PALM PIXI PLUS AND PALM PRE PLUS

Palm have announced two new devices for the AT&T network later this year.  The full press release is as follows:
AT&T today further cemented its status as the U.S. leader in smartphones by announcing an expansion of its industry-leading lineup to include the Palm® Pre™ Plus and Palm Pixi Plus. The new smartphones will run on the nation’s fastest 3G network – and take advantage of the ability to talk and surf the Web at the same time. Further strengthening AT&T’s leadership, the new smartphones make AT&T the only U.S. carrier to offer devices representing all major operating systems. The Palm Pre Plus and Palm Pixi Plus are AT&T’s first smartphones to feature the Palm webOS platform.
The Pre Plus and Pixi Plus available at AT&T will be the only Palm webOS devices in the U.S. to support simultaneous voice and data while running multiple applications at once. The Palm Synergy™ feature in webOS keeps your email, contacts and calendars up to date with integration to Yahoo!, Facebook, Google™, LinkedIn, and Microsoft Office Outlook, all in one view. For more information on Pre Plus and Pixi Plus visit www.att.com/webos.
Palm Pre Plus will be available at $149.99 and the Palm Pixi Plus will cost $49.99, both after a two year contract and mail-in-rebate.
All of these new smartphones feature Wi-Fi connectivity and AT&T customers with these devices will receive AT&T Wi-Fi access at U.S. hotspots included as part of their unlimited data plan. AT&T’s has the nation’s largest Wi-Fi network with more than 20,000 U.S. hotspots.