Palm 9.5% “passive stake” hedge fund investment surprises analysts

Apr 15, 2010
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Palm 9.5% “passive stake” hedge fund investment surprises analysts

After Palm CEO Jon Rubenstein dismissed talk of buy-outs with us the other day as "incessant" rumors, the company has just announced a new investor.  Harbinger Capital Partners have bought a 9.48-percent "passive stake" in Palm, joining 30-percent stakeholders Elevation Partners.  The move won't see Palm take any of the roughly $83m Harbinger spent on shares, but it will likely lend confidence in the firm's outlook.

Harbinger are described as "event/disaster strategy" specialists, choosing to invest in either companies likely to grow significantly or in those currently in a rocky patch.  It's unclear which of the two categories - or perhaps both - Harbinger see Palm falling into; the "passive stake" means that they will have no direct say in how the firm runs its business, but there's the possibility that they could convert that should they want to step in and vote on whether potential take-over bids should be accepted.

Meanwhile Harbinger have also recently completed the acquisition of SkyTerra Communication Inc. for almost $263m, a satellite comms specialist, and are also investing heavily - as in $4bn heavily - in 4G LTE infrastructure rollout.  Whether it views these as compatible with Palm or simply believes the firm to be a likely target for a profitable takeover remains to be seen.

[via Pocketnow and via PreCentral]


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