Elevation Partners have made a little money on the Palm deal, and Palm shareholders have seen a return rather than their favourite phone company sliding down the pan (and taking their shares with them), but that doesn’t stop the legal vultures from swooping in. Finkelstein Thompson LLP, a frequent player in shareholder actions, has announced it’s “investigating potential claims” that those invested in Palm have been short-changed by HP’s $1.2bn buy-out.
Elevation Partners initially pumped $460m into Palm back in mid-2007, and went on to watch the company slump over the following eleven quarters. Now that HP have stepped in with their checkbook, the private-equity firm will take away $485m from the deal, a 5.4-percent profit.
However, Finkelstein Thompson LLP reckon Palm’s board of directors were too quick to snatch HP’s money, and in doing so have left shareholders with less profit than they could have expected to make. The law firm is pointing to Palm’s share price in September 2009 – $17.46 – and a recent (though unnamed) analyst target price of $14 per share; in contrast, shareholders will take $5.70 in cash per share they hold in this HP deal. Of course, if you’re going to take that approach, other analysts have been predicting Palm will crash, burn and take all its shares with it, so maybe Finkelstein Thompson LLP should just offer to take whatever money the deal has made for people and flush it so as to enact that (probably more likely) outcome.