DealZone

Pricey Palm attracts attention

If you want to take a bite out of Apple’s piece of the staggeringly huge (but difficult to quantify in $$$ terms) smartphone market pie, you’d better either have the magical new “thing” or be willing to spend to buy it.

As Anupreeta Das reports, Palm – one of the stalwart originals in the mobile handset space — has remade itself into a terrific target with the success of its Pre. Palm’s stock got a jolt this week on talk that Nokia could be considering a bid. But as she explains, Palm may prove to be too pricey a purchase, even for those with deep pockets.

Since introducing the Pre, Dell, Microsoft, Nokia and Motorola have been mentioned as possible suitors. If one of these cash-rich companies was to bid for Palm today, it would be targeting a stock that has quadrupled this year. Complicating matters, “details on how many units it has sold are skimpy, making it difficult to value the success of Palm’s turnaround story,” she reports.

Palm’s market capitalization is $2.4 billion. Based on the average 34 percent premium that technology, media and telecommunications companies have been sold for this year, according to Thomson Reuters data, this means a price tag of about $3.2 billion.

Dell is already in the early stages of buying up Perot Systems, but will still have nearly $7 billion in cash on hand should it choose to go on a spree. Microsoft, while a cagey customer, as shown in its dealings with Yahoo, has buckets more. For big tech players, the price itself is not the problem.

from MediaFile:

Who runs mergers and acquisitions at Dell?

(Update: Dell PR misspoke about Johnson's responsibilities, and we've made changes below as indicated.)

Dell, which announced plans to buy Perot Systems for $3.9 billion on Monday, completed the deal without help from an executive in charge of mergers and acquisitions.

It's a touchy subject for Dell, which earlier this year named David Johnson to its executive team, poaching him from IBM where he served as head of M&A. IBM filed a lawsuit, saying that Johnson violated a non-compete agreement by taking the job with Dell. But IBM failed to persuade a judge to bar Johnson from working at Dell while the litigation is pending.

Is Dell overpaying for Perot?

With something like $10 billion in cash, Dell wouldn’t seem to be stretching itself to buy Perot Systems. But the $3.9 billion it is offering represents a 67 percent premium, so Dell shareholders should probably ask themselves whether Perot’s business is worth so much.

Perot is a business service company with a big component dedicated to health information. It was founded in 1988 by Ross Perot — the same Ross Perot who ran for U.S. president as an independent in 1992 and 1996.

Dell’s cash pile is burning a hole in its pocket. It has said it wants to step up acquisitions, and services businesses are a logical target area, with higher margins and steadier revenue than the business of building and selling computers that made Michael Dell (pictured in shades above) the tech mogul he is today.

Truth in tender offers? An eyewitness account.

U.S. Securities regulators on Thursday sued a well-connected Kuwaiti financier, saying he reaped millions in suspicious profits after false takeover reports briefly sent shares of Harman International Industries soaring this week.

Reuters reporter Ransdell Pierson was in the office working the Sunday shift when he received a fax with the purported takeover offer.  Unable to verify the authenticity of the fax, Reuters did not publish the story.  Here is Ransdell’s first person account of what happened, and a copy of the fax. Would you have questioned its veracity?

Ransdell Pierson:

I was scouring newspapers on a Sunday shift in the Reuters New York bureau and waiting for news about distressed lender CIT Group, when the phone finally rang and broke my reverie. “Newsroom,” I said, and the caller replied, “Your Jeddah bureau is closed today. Can I send you a fax?” The male caller, who I imagined to be a middle-aged office aide frustrated by the thankless chore of delivering his fax, said it was a press release about a deal. Something about one company buying another for about $3 billion.
“If it’s such a big transaction, shouldn’t this news be coming over the PRNewswire or BusinessWire?” I asked him. He explained that it was the weekend, so faxing a press release was the best route.
I gave him a fax number and he called back, irritated the document hadn’t gone through. I gave him another fax number and he soon called back again, more irritated than before. So I gave him the number of a third Reuters fax machine, but told him that it needed to include contact information for all the parties. “Otherwise, we can’t authenticate it.” “OK, you’ll have it,” he replied.

Dell hunts for a banker

rtr21rzjDell is looking to hire an M&A chief, The Wall Street Journal reports, adding that the computer maker has been interviewing “investment banking and technology industry veterans” for the newly created executive position, and could announce a hire within the next month.

Two bankers have told me in the past few weeks this is the case. One Silicon Valley banker said Dell has been trying to fill the position for quite a while, but no M&A banker worth his or her salt wants to join the company, which is notorious for lagging behind on acquisitions, even as rivals like Cisco, Hewlett-Packard and IBM go forth and acquire every few months.

“Joining Dell is basically as good as saying goodbye to your M&A career,” said a banker who has received feelers from the Round Rock, Texas-based company.