Smartphone maker Palm said it increased the size of its planned stock offering and expects to raise $313.1 million.
The offering was increased to 20 million shares from 16 million and was priced at $16.25 each, a 5 per cent discount to the stock's closing price on Tuesday.
According to a Palm filing yesterday, private equity firm Elevation Partners and Roger McNamee, the firm's co-founder and a member of Palm's board of directors, intend to buy $37 million of the shares being offered.
Palm had said last week Elevation Partners would buy $35 million of the stock offered.
Elevation Partners owned slightly more than 30 per cent of Palm as of August 31st through a combination of preferred and common shares, according to the filing.
Proceeds of the offering will be used for working capital and other general corporate purposes, the company said.
California-based Palm, which has lost money for more than two years, hopes to revive its fortunes with a new line of smartphones based on its webOS software.
In the second quarter, Palm shipped 823,000 smartphones, surpassing Wall Street estimates, but that was a fraction of the 5.2 million iPhones sold by rival Apple Inc in its second quarter.
Palm said yesterday that it may end up raising $359.9 million if an over-allotment option is exercised in full. Underwriters have the option to purchase up to 3 million additional shares to cover over-allotments.
Goldman Sachs and JPMorgan are joint bookrunners for the deal.
The stock has risen about 15 per cent in the past five days, fueled by talk about a possible takeover bid, and traders covering short positions, according to an analyst.
Shares of the company finished yesterday regular session down 11 cents at $16.96.
Reuters