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Palm settles legal challenges to Handspring takeover
Way open for next week's shareholder vote
Handspring and Palm have persuaded two litigants to settle out of court legal action brought against Handspring.
Both cases centre on Palm's acquisition of Handspring, which the plaintiffs - Kathleen Goldhirsch and, separately, Varant Majarian - clearly objected to the deal, almost certainly because they believe it undervalues Handspring.
The suits were filed on 17 June and 19 June, respectively, days after Palm announced it had agreed with Handspring that it would acquire the smaller company.
After the spin-off of PalmSource, Handspring's shareholders will receive 0.09 PalmOne shares for each share of Handspring common stock owned. PalmOne will issue approximately 13.9 million shares of common stock to Handspring's shareholders on a fully diluted basis. Handspring's shareholders will then own 32.2 per cent of the newly merged company on a fully diluted basis, Palm's shareholders the rest.
Handspring shareholders will get no PalmSource stock.
Under the terms of the proposed settlement, both lawsuits will be dismissed and both Palm and Handspring must make "additional disclosure be made concerning the merger" - which Handspring will do in a Securities and Exchange Commission 8-K form to be filed today.
The plaintiffs may also pursue $125,000 legal costs, to be paid by Handspring if they do so.
The settlement has now to be ratified by the Delaware Court of Chancery, New Castle County, but that would seem a mere formality given the agreement reached between both parties.
Shareholders will get to vote on the proposed acquisition next Tuesday. ®