Palm shares leap 20% as Lenovo takeover rumours circulate

Palm shares leap 20% as Lenovo takeover rumours circulateRarely has a single tech company been associated with so many different takeover contenders, and fresh whispers of an imminent buy out today (Wednesday) saw mobile phone makers Palm’s stocks soar 20%.

Sparking the share price surge was a rumour that Chinese computer maker Lenovo was casting its beady eye over the company for a potential takeover bid.

Naturally, there’s been no official statement either way from both companies, although pundits were looking closely at a recent comment made to a German newspaper by Lenovo’s big cheese, Yang Yuanqing.

Although Palm wasn’t named, he mentioned that his company were mulling over making more acquisitions to for its mobile Internet business and that was enough to send speculators, well, speculating.

Palm shares leap 20% as Lenovo takeover rumours circulate

Trouble in t’Palm

Lenovo’s name can now be added to the growing list of potential Palm purchasers floated about in recent times, with big name suspects including Dell, Hewlett-Packard, Motorola, Blackberry and Nokia.

Although Palm and their main investors, Elevation Partners, remain buoyant about the company’s prospects, some analysts suspect that a buyout will be the only way for investors to salvage some dosh back.

Route into America

Their handset sales may be sluggish in the States, but Palm could provide a nice way for a new company to break into the U.S. wireless business, providing an alluring combination of an advanced and well-regarded mobile operating platform backed by strong relationships with carriers.

“If you want a seat in the U.S. market, i.e. carrier relationships and an established brand, than you have to buy in,” commented Matt Thornton of Avian Securities on Wednesday. “Lenovo has no shot doing it on their own,” he added.

As for us, we rather like Lenovo – their rough’n’tough Thinkpads rather do it for us – and the combination of Palm’s superb webOS  and Lenovo’s rock-solid business reputation could prove a compelling combo.

[Via]

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