Canaccord Adams Sees a Palm (PALM) Takeover Below the Current Market Price

April 12, 2010 2:32 PM EDT
Analysts at Canaccord Adams commented on Palm (Nasdaq: PALM) today on rumors of a potential sale.

The firm said while WebOS has value as an asset, they would expect significant integration issues for a would-be acquirer.

The firm notes that on an enterprise valuation, bids are said to be between US$1 billion and US$2 billion, with four potential buyers, including HTC, Lenovo, and Cisco (Nasdaq: CSCO) apparently having submitted bids and made it to the second round.

Analyst Peter Misek said, "Our probability-weighted enterprise valuation yields an expected equity value of approximately US$4.37. While the likelihood of an acquisition has clearly increased, the range of possible enterprise valuations is extremely wide, as are the implied valuations for common equity holders. As such, we are maintaining our SELL rating and placing our target price UNDER REVIEW."

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