MENLO PARK, Calif., Aug 16 (Reuters) - Software maker Be
Inc. <BEOS.O> on Thursday said it agreed to sell its
intellectual property and technology assets to Palm
Inc.<PALM.O>, the No. 1 maker of handheld devices, for $11
million in Palm stock.
The move by Menlo Park, California-based Be, developer of
the BeOS software system, follows its admission in March that
its existing cash might not be enough to meet its needs beyond
the first half of the year. Then in April, it signaled its
intention to sell the company, saying it was in the best
interests of shareholders.
Earlier this month, it cut some 32 percent of its work
force.
Shareholders have this year suffered with Be's shares,
which at Wednesday's close of 45 cents, were off 39 percent,
and have underperformed the S&P Computer Software Index by 49
percent.
In early trade on Thursday, the stock tumbled 30 percent,
or 13.7 cents to 32 cents.
Be, which develops software and related services for
Internet appliances and digital media applications, will
retain certain rights and assets, including Be's cash and
certain contractual rights.
Palm, which makes both the handheld devices and the
software that powers them, has been bolstering its software
side, amid a slump in sales of the pocket-sized devices. On
Thursday, it said it has offered jobs to Be's engineers.
"We look forward to them joining forces with our own
outstanding engineers on future versions of the Palm OS," said
Carl Yankowski, Palm's chief executive officer, in a
statement.
Be's board has approved the transaction, and the winding-up
of its operating business following the closing, it said. It
intends to liquidate soon after the closing of the transaction.
The transaction is expected to close in the fourth quarter of
this year.
