updated 03:35 pm EDT, Wed March 21, 2007
Motorola May Buy Palm
Motorola is the prime candidate for buying Palm, an anonymous investor in the Treo manufacturer said on Wednesday. The source claimed that Motorola was now leading the pack of four companies that had been previously been competing to buy Palm, and confirmed that the former could be ready to announce a $2 billion deal as soon as Thursday.
Although Nokia had reportedly been leading the bids in recent days, the shareholder said, both Motorola and Palm have realized that they both stand to gain from a merger by fending off major competitors, singling out Apple as Palm's greatest fear.
"Apple is about to walk away with the OS (operating system) market for handheld computers," the contact noted. "Microsoft has been successful because it's always owned the OS. In some ways, the iPhone from Apple is a trojan horse, a handheld computer running the Mac OS that's poised to take over the world."
By finalizing their union, Motorola and Palm would form the largest single Windows Mobile phone producer in the world and would offer a stronger alternative to smartphones based on other operating systems, especially Apple's iPhone and Nokia's E- and N- series phones based on Symbian.
The shareholder cautioned that Morgan Stanley, the bank negotiating the deal, had not finalized a deal and that the situation could change even in the day before the announcement. However, it was made clear that Motorola had every reason to be aggressive in its bid as it would quickly profit from taking over Palm's affairs.
"They could pay up to $25 a share and the deal would still be accretive," the investor said. "Accretive immediately." [via CNBC]