DOW JONES NEWSWIRES
Palm Inc. (PALM) said it and other defendants have agreed to
settle a possible class-action lawsuit filed last month in
connection with Hewlett-Packard Co.'s (HPQ) planned acquisition of
the smartphone maker for about $1 billion in cash.
The company did not specify any payments in connection with the
proposed settlement, although it did say the plaintiffs would seek
an award of attorneys' fees and expenses.
In a filing with the Securities and Exchange Commission on
Wednesday, Palm said it denied all liability related to the suit,
which accused the defendants of breaching a duty to shareholders by
failing to get the highest offer possible for the company.
Palm also said it was not required to disclose more information
about its merger talks, but agreed to do so to avoid delaying the
merger and to minimize the expense of defending the suit.
It previously described some aspects of the sale negotiations in
a filing last month. The latest filing fills in some details but
does not name the other bidders besides H-P, which offered $4.75 a
share on April 13.
The latest filing says a potential buyer referred to as Company
C reduced its bid to $5.50 a share from an earlier one of $6 to $7
a share because of information it learned in a detailed
due-diligence review.
In addition, Palm's board concluded that private-equity firms
were not likely buyers because of the company's projected revenues
and cash flows and the state of the private-equity and acquisition
financing markets at the time.
Palm's shares lost 2 cents, to $5.66 in after-hours trading. The
stock was down 43% this year as of the close.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
Kathy.Shwiff@dowjones.com