GO
Loading...

Enter multiple symbols separated by commas

CNBC Exclusive: Palm Shareholder Expects Motorola Deal Soon

Jim Goldman
Jim Goldman

A major Palm shareholder told CNBC he expects Motorola to announce as soon as Thursday a deal to acquire Palm for roughly $2 billion.

The shareholder, who preferred not to be identified or have his stake disclosed, confirmed that Morgan Stanley was contacted by Palm in January to shop the troubled hand-held device maker and that the process intensified a couple of weeks again.

That was when Motorola finally got into the game, this shareholder said. Prior to that, negotiations were limited to Nokia and two private equity firms, Silver Lake Partners and Texas Pacific Group.

For the last two weeks or so, all four have been involved, the shareholder said. And now it appears that it will all boil down to Motorola, which the shareholder said is the right move for both companies.

"For Motorola, I think it's the threat of Nokia owning Palm," the shareholder told CNBC. "The upside for Motorola is much greater. If they own Palm, they're really the most substantial player running the windows (mobile) operating system. Motorola could become a key Microsoft partner."

"They (Palm) generate a lot of cash," the shareholder added. "Paying $2 billion in cash for a company generating $120 million in free cash flow is not a stretch. They could pay up to $25 a share and the deal would still be accretive. Accretive immediately."

He also said that Motorola and Palm's futures ride on this deal as the wireless world prepares to take on Apple Computer.

surviving_you_serengeti.jpg

Of course, this isn't a done deal yet, considering all the major players involved, so Palm shareholders have to be prepared for surprises.

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

  • Why women cheat?

    Is cheating bad? Why do women cheat? The founder and CEO of affair website Ashley Madison tells all, including why he has his eye on China.

  • American Pharoah

    As American Pharoah chases the Triple Crown at the Preakness this Saturday, his earning potential can only go up.

  • Banking on your brand: Mika Brezezinski

    Mika Brezezinski, "Morning Joe" co-host, talks about giving women, entrepreneurs and millennials the tools to live and work to their full potential.

U.S. Video

  • Cramer: Here's a sign the market could rally

    Wall Street's been soaking in red, but "Mad Money" host Jim Cramer has one signal to watch for that could point to another run.

  • Burger war maneuvers

    Cramer looks at the number of company's selling burgers and tries to determine the quality names, as well as those to avoid.

  • Cramer: What's driving defense?

    Cramer says that even though President Obama has made it clear the US can no longer be the world's policeman, the country can become the world's arms dealer. Profiting from defense spending.