Unstrung, citing sources close to the situation, said Nokia Corp. was a leading contender, although Palm is said to prefer a private-equity buyer. Texas Pacific Group is one of the two private equity firms said to be interested, the blog said, adding Silver Lake Partners is speculated to be the other.
Palm, which hired Morgan Stanley this month to help explore its strategic options, is demanding $20 or more per share, Unstrung said. In premarket electronic trade, Palm recently traded at $18.90 a share, up from its Monday close of $18.14.
Unstrung added that Motorola may try to block Nokia with a bid. According to the blog, the Motorola executive opposing a Palm deal has left the company, which is looking to enhance its mid-tier and high-end offerings.
Morgan Stanley wants a deal by Thursday, when Palm is expected to report its third-quarter results, Unstrung said.
None of the companies mentioned was immediately available for comment.
Palm has been the subject of relentless rumors that it is a takeover target. The company, which has switched its emphasis from hand-held computers to high-end cellphones in the past few years, faces intense competition in the cellphone industry. With a market capitalization of less than $2 billion, Palm is considered a tiny player compared with giants such as Motorola and Nokia.
What's more, Motorola and Nokia have introduced products similar to Palm's Treo, which combines a cellphone with a hand-held computer. Apple will introduce a cellphone this year that is expected to increase the competitive stakes.
Palm also has had trouble selling its Treo to corporations, where Research In Motion's BlackBerry is entrenched.
For its second quarter ended in November, Palm reported a 95% drop in net income, largely on a year-earlier tax gain and a 12% drop in revenue. It also lowered its outlook. The situation was compounded by the delay of a key product, the Treo 750, because of certification issues with carriers.
-By George Stahl, Dow Jones Newswires; 201-938-5153; george.stahl@dowjones.com.
(END) Dow Jones Newswires "
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