HP-Palm Merger

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Case Details:

Case Code : BSTR383
Case Length : 27 Pages
Period : 2009-2010
Pub Date : 2011
Teaching Note : Not Available
Organization : Hewlett-Packard / Palm, Inc
Industry : Information Technology / Electronics
Countries : Global; US

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Introduction Contd...

Jon Rubinstein (Rubinstein)⁶, Chairman and CEO, Palm, said, "With HP's full backing and global strengths, I'm confident that webOS will be able to reach its full potential... This agreement will accelerate the development of this incredible platform with new resources, scale, and support from a world-respected brand."⁷

On April 28, 2010, it was first made public that an agreement had been drawn up between HP and Palm, under which HP would acquire the latter as a subsidiary of its Personal Systems Group. HP paid a consideration of US$5.70 in cash per ordinary share that Palm held, a price pegged at a premium of 22.58 percent of the closing price of the share as on April 27, 2010.

As part of the acquisition, HP also took up Palm's series B and C convertible preferred stock at US$1010 and US$1753.85 respectively.⁸ In an email to his team immediately after the HP-Palm merger announcement, Rubinstein wrote, "I am very excited about the potential of this merger (and not only because I started my career there). HP recognizes the value in our platform, our IP, and our people, and that is all a result of your hard work."⁹

Excerpts >>

6] Jon Rubinstein (Jonathan J. Rubinstein) is an electrical engineer and computer scientist credited with leading Apple's comeback with the development of the technology behind the iPod, the iPad, the iMac, and the iBook.
7] "HP Completes Palm Acquisition," www.hp.com, July 1, 2010.
8] http://investing.businessweek.com/businessweek/research/stocks/snapshot/historical.asp?ticker=PALM:US.
9] Dieter Bohn, "Jon Rubinstein's Company Email about Acquisition," www.precentral.net, April 28, 2010

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