October 10, 2001 12:45 PM PDT
Shares of Be worth pocket change
In a regulatory filing Tuesday, Be said it plans to immediately sell the $11 million worth of shares as soon as the deal closes. After paying off all its outstanding debts, Be said it believes that, over time, shareholders could receive up to $3.8 million, or 10 cents a share, according to documents filed with the Securities and Exchange Commission.
However, the company cautioned that it cannot predict the amount and timing of any distributions and warned that unforeseen liabilities could reduce the amount left over for shareholders.
Palm announced in August that it would acquire the technology assets of Be. Plans call for Be to be dissolved following completion of the asset sale.
The deal requires the approval of shareholders, but Be warned in the filing that if shareholders reject the asset sale, the company will most likely be forced into bankruptcy and shareholders will get nothing. Shareholders will vote in advance of a special meeting to be held Nov. 12.
A Be representative was not immediately available to comment on the filing.
Be stock was selling at around 15 cents a share Wednesday.
In addition to acquiring Be's technology, Palm also is getting a number of Be employees. For the deal to go through, Palm must be able to hire at least seven out of eight workers identified as "key employees," and at least 33 out of 42 other workers defined as "designated employees." Be had 57 employees at the end of September.
The operating system company, founded by former Apple Computer executive Jean-Louis Gassee, had been searching for a buyer for some time. The company said in the filing that it, along with investment bank Lehman Brothers, had searched for potential buyers for Be or its assets but found "no serious indications of interest except from Palm."
Although cash for shareholders is limited, several executives of the company stand to receive a year's severance pay as part of their employment agreements. Among those slated to receive such payments are Gassee, Chief Financial Officer P.C. Berndt, Chief Operating Officer Steve Sakoman and seven others. Palm also has been providing interim financing to keep Be running.
Palm's deal, though perhaps the best available to Be now, is certainly not the best offer the company has received. In 1996, Apple offered as much as $125 million for Be, according to the book "Apple Confidential." But Gassee and Be's backers held out for more. Instead, Apple acquired Steve Jobs' Next, and Be was left to fend for itself.
The company, launched in 1990, struggled to find a home for the Be operating system. Most recently, the company had sought to license the OS for use in information appliances. However, the company found limited success in that struggling market. The only high-profile use of the operating system was in Sony's ill-fated eVilla, which was shelved in August, after less than two months on the market.