Palm Inc (PALM)

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Is Palm Putting Itself Up For Sale?
Comments (0) Text Size: A A Print Email Share After persistent rumors that several suitors might be interested in the ailing Palm (NSDQ: PALM), now Bloomberg is reporting that the company has put itself up for sale and is seeking bids as early as this week.

According to three people familiar with the situation, Bloomberg said the company has hired Goldman Sachs and Frank Quattrone’s Qatalyst Partners to find a buyer. In the past week, HTC and Lenovo were identified as two of the companies that may be potential bidders. The sources said Dell also looked at deal, but decided to pass. On Friday, Palm’s stock jumped based on rumors that the Pre-maker may receive a takeover offer. The company’s market value now hovers around $870.8 million. Bloomberg said a Palm spokeswoman declined to comment.

The company has launched two products to fairly rave reviews, but has failed to gain significant market traction. It was criticized for partnering initially with Sprint (NYSE: S) Nextel, which was having its problems of its own, and then the handset-and OS-maker blotched its launch with Verizon Wireless. It now has a significant backlog of unsold devices, and is facing a cash shortage.

Still, CEO Jon Rubinstein made the point in a recent interview that Palm was a turnaround story and would have been dead in the water with out the new webOS, which is a valuable asset. In the company’s previous earnings call, Rubinstein dismissed the idea that the company could be up for sale, and said that if any offers were serious, he’d be obligated to bring them to the board’s attention.

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