Bono set for multi-million pound Palm windfall
Published 12/04/2010 | 15:32
U2’s Bono looks set to collect a multi-million pound windfall from the sale of Palm, the beleagured smartphone maker.
Bono’s private equity company Elevation Partners is a major shareholder in Palm, which has put itself up for sale.
Elevation bought a further $100m (€73.5m) Palm shares at $3.24 a share in December 2008 to take its stake to 41pc. Palm, which saw its shares jumped 32pc to $5.16 last week, is reportedly seeking bids for the company.
Rival phone makers HTC and Lenovo are said to have already made offers for Palm, which recently sought to revitalise its fortunes with the launch of the Pre and Pixi range of high-end smartphones based on the WebOS operating system.
While the handsets have received critical acclaim, sales of the devices have been disappointing, and the value of the company has plunged, with Palm posting 11 straight quarterly losses.
“Palm still has quite a good brand in the US market and some strong technology,” Frank He, an analyst with BOC International Holdings told Bloomberg. “You can do something with it. The share have gone down a lot and the company may become attractive to anyone looking for a turnaround play.”
Both Palm and Goldman Sachs have declined to comment on the reports.
Palm, which made its name making personal digital assistants in the 1990s, had hoped the launch of the Pre would reinvigorate the company. The device, which used the innovative WebOS operating system to enable users to send emails, surf the internet and use dozens of applications at the same time, was touted as an iPhone killer. But the critical acclaim did not translate in to solid sales, and Palm is currently ranked sixth in the US smartphone market, behind rivals such as Research in Motion, makers of the BlackBerry, and Apple.
Elevation bought a 25pc stake in the company for $325m in 2007 and has installed Jonathan Rubinstien, a former head of Apple’s iPhone division, as chairman.