Wednesday, April 28, 2010

Hewlett-Packard buys Palm for $1.2 billion; Philadelphia newspapers sold to senior lenders for $139 million

Two breaking stories this afternoon:

Hewlett-Packard has agreed to buy the distressed cellphone maker Palm for $1.2 billion. Palm put itself up for sale following several disappointing earnings reports as its Pre and Pixi brands have failed to find their place in the mobile marketplace now dominated by Apple's iPhone, Google's Android, and RIM's Blackberry.

The most likely reason for H-P's willingness to over pay for Palm (the sales price equates to a 23 percent premium over the stock price) is to use Palm's WebOS on its products, and to keep that OS out of the hands of other companies that might wish to enter the marketplace.

Philadelphia Newspapers has been sold to its senior lenders for $139 million. The deal includes $70 million in cash and $40 million in debt, plus real estate.

"Brian Tierney was extremely gracious in defeat. He pledged his support for a smooth transition. The senior lenders were very grateful," said Ben Logan, a lawyer for the committee of unsecured creditors is quoted in the story.

Tierney said: "We didn't make it. I think I'll go home tonight and sleep like a baby, which means I'll wake up every hour crying."

Two companies failing in the marketplace: one bought for a premium, the other for pennies on the dollar.