Treo maker Palm was about to be taken over

As we went to press, US industry sources were reporting that Treo maker Palm was about to be taken over.

Nokia is a leading contender, though the smartphone maker’s board would reportedly prefer a private-equity buyer; two are said to be interested, even at a per-share price of $20 (Palm has recently been trading at $18.90 on bid rumours).

Nokia’s interest would be logical enough – the Finnish company has found North America a tough slog. Motorola might also be a candidate, with a preemptive strike specifically intended to block a Nokia bid.

Palm is a minnow in this market, with a capitalisation of less than $2bn and a market position way behind RIM, Motorola and Nokia.

For its second quarter ended in November, Palm reported a 95% drop in net income. That was largely due to a one-off tax gain in the year-before period, but its operating revenues were down 12% and the Treo 750 was late in shipping.