Palm Defends Its Deal

Palm sold 25% of its stake to Elevation Partners on Monday and did a cash distribution of $8.50-a share.

The deal itself was a little unusual because it had a private equity firm buying just a quarter of the company, while Palm paid out a huge sum (a total of $940 million) to its shareholders.

I spoke with Ed Colligan, CEO of Palm, and Roger McNamee, one of the founders of Elevation Partners yesterday. After my discussion with them, I thought the deal was a great move on part of Palm.

Here's my story from TheStreet.com explaining why:

Palm may have just bought its freedom.

The smartphone company, in selling a 25% stake to private-equity firm Elevation Partners on Monday, got the one thing that its core management has fought hard for over the years: the ability to be an independent player and control its destiny.

The $325 million deal will also buy Palm the two executives it hopes can help revitalize its business -- Jon Rubinstein, former senior VP of hardware engineering and head of the iPod division at Apple , and Fred Anderson, Apple's former CFO.
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Now, with happy shareholders, potential predatory moves thwarted and some of the sharpest minds in Silicon Valley on board, Palm believes things can only get better.

Read more here.