HP bought Palm after a five-company bidding war
Saturday, May 22, 2010
After a long heated courtship, it seems that HP and Palm became the happiest of corporate couples.
According to Palm's latest statement to shareholders, HP was the winner of a month-long bidding war that involved serious offers from five companies… a bidding war that involved the CEO Jon Rubinstein personally warning HP that it had to "significantly and immediately" increase its offer to remain in the game.
This story started in early February when Palm recognized that it was in trouble, a few weeks before it posted its disappointing quarterly results, and on February 17 the company organized a committee headed by CEO Jon Rubinstein to investigate its options, everything from licensing webOS to selling the company was on the table. And in early March Palm's board of directors decided that selling the company was the best option.
As a result, 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 was publicly named in the filing, and it made its first offer on April 13, for $4.75 per share or about a billion dollars, and requested a 30-day period of exclusive negotiations.
After receiving the other companies' offers, Palm told HP that it wouldn't give it an exclusivity period unless it improved its offer, and finally HP responded by raising its offer to $5.70 per share, and this was the winning bid at just 20 cents a share more than its primary rival.