HP pays a billion dollars for Palm

Mark Hurd’s Hewlett Packard said it will buy Palm for slightly over a billion dollars in cash, making the ailing phone company more of an attraction than it was a week ago.

The move will shiver Dell’s timbers – it wants to be a big player in the smartphone league, and having HP acquire a contender in the market will also shake up other PC players, such as spun-off IBM subsidiary, Lenovo.

HP will pay $5.70 per Palm share and soak up debts from Palm too – as well as acquiring an operating system – PalmOS – that some pundits believe is a better bit of operating system than Windows Mobile and Android.

Palm staff will continue to work for HP – CEO Jon Rubenstein will head up the subsidiary while Hurd’s firm will gain rather a large portfolio of intellectual property.

The deal will be subject to regulatory constraints – but it’s an All American deal and it’s unlikely anyone will object.

Apart from Dell, Lenovo, HTC and Apple, that is.