H-P offered $5.70 per share for the company, a 23% premium over Palm's closing price of $4.63 Wednesday.
In after-hours trading, Palm was up 27.4%, or $1.27 to $5.90. H-P shares were down 38 cents, or 0.7%, to $52.90 after hours.
The move caps a wild ride for Palm, which was lifted from oblivion last year by a new leadership team focused on building a new touchscreen-centric smartphone operating system to rival Apple's (AAPL) iPhone. The Palm Pre and its smaller follow-up the Pixi did not sell well at Sprint (S), however.To follow that dismal experience, would-be sales partner Verizon (VZ) snubbed Palm in favor of a Google (GOOG) Android-powered Motorola (MOT) Droid phone. Palm's sales woes and dwindling finances forced the company to seek alternatives, namely a buyer. With H-P, Palm could hardly have found a better partner. H-P, the No. 1 computer maker, has been nearly absent in the mobile phone market. Rivals like Dell (DELL) and Asus have made plans and partnerships to make phones, but H-P has lacked a plan -- until now, that is. "Palm possesses significant IP assets and has a highly skilled team. The smartphone market is large, profitable and rapidly growing," H-P personal product chief Todd Bradley said in a press release. "We're thrilled by HP's vote of confidence in Palm's technological leadership," Palm CEO Jon Rubenstein said in the press release. Rubenstein is expected to remain with Palm as a unit of H-P.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV