Palm’s board has gained shareholder approval for a 1-for-20 stock split which it claims will simplify the process of separating the hardware business of the Solutions Group from the PalmSource software subsidary. Palm can initiate the split at a ratio of between 1-for-10 and 1-for-20 at any time between now and 1st April 2003.
“Today’s shareholder vote represents another step toward realising one of our key annual objectives to enhance shareholder value: the creation of two well-capitalised, profitable, high-growth companies,” said Eric Benhamou, Chairman and CEO of Palm. “The ability to effect a reverse stock split will help position Palm for the anticipated external separation of PalmSource, which will complete our restructuring and provide optimal clarity of purpose for each Palm business. The vote shows that our shareholders understand that the reverse split will help generate additional institutional investor interest in Palm.”
Palm intends to distribute shares in PalmSource to its existing investors when the two companies are split. It executed Palm’s split from 3Com in a similar fashion when the company was floated.