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By David Goldman
staff writer
April 28, 2010
NEW YORK (CNNMoney.com) -- Hewlett-Packard announced Wednesday that it would buy struggling smart phone maker Palm for $1.2 billion.
HP (HPQ, Fortune 500) -- which is known more for its computers, notebooks and printers than its smart phones -- will buy Palm (PALM) for $5.70 a share in cash, a 23% premium over Palm's closing price of $4.64 on Wednesday. After hours, shares of Palm soared 28%, while shares of HP fell less than 1%.
"Palm's innovative operating system provides an ideal platform to expand HP's mobility strategy and create a unique HP experience spanning multiple mobile connected devices," Todd Bradley, vice president of HP, said in a prepared statement.
On a conference call with analysts, Bradley said HP is looking to increase its market share in the rapidly growing smart phone market. He said the deal represents a "significant opportunity for profitable growth."
"HP and Palm will make a powerful combination," said Bradley. "Palm has a deep bench of engineering talent ... but Palm is operating [at a] loss right now, so we have some work to do."
http://money.cnn.com/2010/04/28/technology/hp_palm/index.htm?cnn=yes
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