Now Palm execs will even be able to afford the iPhone…

Earlier this year, Palm announced a complicated deal where it’s selling part of itselft to Elevation Parners for $325 million and restructuring itself and doing a bunch of corporate-y stuff that will make your eyes roll back into head.

But here’s one thing that won’t tax your brain. In a prospectus filed today asking shareholders to approve whatever it is they want to do, Palm outlined some details of the deal. That includes that current stock will be converted into shares into the new company, plus current shareholders will get $9 for each share they own.

The document also disclosed how much stock current insiders own, and at $9 per share, they’re in line for a sweet payday if shareholders approve the deal. As a group, directors and executives hold 6.979 million shares, which a $9 per share would collect $62,817,138.

The top beneficiaries and their potential payday:

*Eric A. Benhamou, chairman: $5,167,368
*Donna L. Dubinsky, CEO of the original Palm: $16,065,522
*Edward T. Colligan, current president and CEO: $10,617,480

That should buy eBay a lot of Pez dispensers…

eBay, the San Jose-based on-line auction site, disclosed today that it had reached an agreement with Wells Fargo Bank and Banc of America Securities to extend its credit limit from $1 billion to $2 billion, with an option to increase it to $3 billion.

According to a securities filing today, the company said it may use the funds for a variety of things, including acquisitions. That would be good news for dozens of companies thinking about IPOs that will be put on hold now that the market has gone south for the summer.

Opsware, meet bachelors 1 through 11…

In a series of securities filings today, Opsware provided additional background for its merger with Hewlett-Packard. Among the most interesting revelations is that at one point at least 11 companies expressed interest in buying the data center software company.

Despite all the suitors, the company initially had trouble getting a bid it would consider. Most companies weren’t willing to pay more than $11 a share for the company that was founded by Silicon Valley poster boy Mark Andreessen.

The company pretty much told everyone to forget it, even though it was nervous about the pending public offering by an unnamed competitor (probably BladeLogic). But eventually, companies started knocking on its door again, including HP. Pretty soon, the bidding came down to HP and another company, who bid the price up to $14.25 per share, the final price when the deal was announced on July 23.

Two other interesting notes: While the company was weighing various offers and holding discussions, board members were awarded 25,000 options priced at $9.28 on June 26, the day of the shareholders’ meeting. This included Simon Lorne, William Campbell, Michael Ovitz and Michelangelo Volpi.

But it didn’t include Mike Homer — a board member who resigned on May 21 for “personal reasons.”

Merger Monday

Time to say goodbye to a two more public companies in the Valley.

FoxHollow Technologies, a medical-device maker in Redwood City, said it accepted a deal worth $780 million in cash and stock to be acquired by ev3 of Plymouth, Minn. Check out our brief story here.

According to a 425 filing in connection with the merger, CEO John Simpson and Merck & Co., the big pharmaceutical and FoxHollow investor, together own 31.7 percent of the copmany’s stock. That puts their share of the take at $247 million.

Interestingly, shareholders have a choice. They can either receive 1.45 shares of ev3 common stock and $2.75 in cash; or they can opt to take all cash at $25.92 per share, or all stock with 1.62 shares of ev3 common stock.

Wonder which one Simpson is taking?

Update: Mike Ennen, a FoxHollow spokesmen, wrote back to say that Simpson holds 25 percent of the shares, worth about $195 million. Also, Ennen wrote in an e-mail:

He has told the company that he is likely to elect all stock as an indication of his belief in our prospects as a combined company.

Meanwhile, Hewlett Packard said it’s buying Opsware, the Sunnyvale company for $1.6 billion. Nice score for the man who started the company, Marc Andreessen. Actually, that may be a better exit thatn his last start-up: Netscape. Read the Merc’s story here.

At last count, Andreessen held 9,691,680 shares. At $14.25 per share, that works out to $138,106,440.

I’ll dig through the filings for more info, but for now, you can also get the details from Marc Andreessen’s blog.

Also, let’s no forget that Hollywood big shot Michael Ovitz, once one of the biggest agents in movietown and former number 2 at Disney, was a board member and investor. He held 1.17 million shares as of late May, now worth a nice $16.67 million. No doubt, he needed the money.

Goodbye, Agile Software

Oracle completed its deal to acquire Agile Software on Monday. Shareholders of the San Jose company approved the deal on Friday. Oracle will pay $495 million in cash, valuing Agile at $8.10 per share. On Monday, Agile filed to be delisted from Nasdaq.

For Agile, it’s a rather humble end to a once sizzling company. Agile went public in late 1999, and its stock rocketed past $100 per share. But the company could never quite right itself after the bust, though its stock briefly topped $12 per share in late 2003.

According to several securities filings, back in Spring 2005, the company started thinking about its “strategic options.” It brought in an investment bank to look at either selling the company or buying other targets. Talks with one potential buyer fell through in Spring 2006. Then things got ugly:

On July 17, 2006, we announced that we would be unable to file our annual report on Form 10-K for the year ended April 30, 2006, as a result of a review of our financial statements and internal controls with respect to our Taiwan sales operations, which review had not been completed at that time. On October 26, 2006, we announced that we had concluded that we needed to restate certain annual and interim financial statements for our fiscal year 2000 and later periods as a result of our review of our historic stock option grant practices.

Agile hired Citigroup in September 2006. But things still moved slow. The company drew up a list of 15 possible suitors, including companies and private equity firms. They contacted 8, but soon ruled out private equity firms, thinking other companies would pay more, according to a Defm-14a securities filing it made on June 7.

Oracle first talked to Agile in December 2006, and said it might offer $8.60 per share. But after entering negotiations, Oracle backed out, citing concerns that Agile might not be able to get its filing up to date. Agile began negotiating with another company, unnamed, that was offering $9.00 per share. But in late March, that company pulled out after doing some due dilligence and finding some things it didn’t like, according to the Defm-14a.

In late April, Oracle came back to the table, offering $8.10. Talks began that led to the announcement of a deal on May 15.

If there’s a happy ending in all of this for anyone, it’s for co-founder Bryan D. Stolle. He  served a chairman of the board since the company’s inception in 1995. He was also president until 2002 and chief executive until April 30, 2006.

Stolle still beneficially owned 1.15 million shares when the deal closed, which would be worth $9,331,953.30. That should soften the blow, a bit, and add nicely to the $25 million worth of stock he sold since 1999.

Considering Agile’s history, one that was hardly illustrious, it still managed to stay afloat long enough for insiders to sell a total of $178.7 million worth of stock.

The story behind the Komag and Western Digital merger…

Both Komag and Western Digital filed extensive documents today that for the first time provided the details behind the courtship that led to the announcement of a merger last month. Western Digital plans to buy Komag, a San Jose maker of disc drive components, for $1 billion, or $32.25 per share.

The marriage began with a first date. Specifically, John Coyne, then president and chief operating officer of Western Digital, had dinner with Timothy Harris, CEO of Komag. Coyne said his company was interested in a possible deal.

This led to three months of talk, letters, phone calls which ended abruptly. On Feb. 26, Western informed Komag that it was ending the courtship. Considering that Komag had a strong 2006 and was on its way to a solid first quarter, there was no reason to panic.

But, things change. Fast. According to Komag’s filing:

On May 23, 2007…The Board of Directors discussed the Company’s business, operations and financial performance, as well as industry and economic conditions generally, noting that market conditions impacting the Company had changed substantially over a short period of time.

Blood in the water. And out come the sharks. On June 5, Komag got a call from another unnamed company, Mystery Company A, that was interested in a possible acquisition. In addition, the company was  contacted by a private equity group. Komag’s chairman soon called the folks at Western Digital to ask if they were interested in trying for a deal again and if so, that it would have to happen fast.

Western Digital said yes, and the race was on. The PE folks dropped out, but Komag continued to negotiate with Mystery Company A and Western. MCA bid, and then raised its bid. After reviewing the competing bids, Komag rejected the offer from MCA which dropped out of bidding on June 23.

Just five days later, Western and Komag agreed on a deal which was announced at the same time Komag annouced that its second quarter revenue would fall 30 percent from the first quarter.

Goodbye, Castelle

Here’s the latest chapter in the tale of the Incredible Shrinking Valley, where the number of public companies continues to dwindle.

Add Castelle, of Morgan Hill, to the list of dearly departed public companies in Silicon Valley. The company has officially been delisted as of Wednesday, according a securities filing today. Though unlike many others, this at least at a somewhat happy ending. On April 26, Captaris of Bellvue, WA announced it was spend $18.2 million to acquire Castelle, which had about $7.4 million on its balance sheet.

Castelle, which describes itself as “network fax solution,” only generated $10.6 million profit in 2006, but did manage to turn a profit of $.7 million.

Adobe goes shopping

The San Jose software maker disclosed in its second quarter earnings report filed on Tuesday that it bought two, teeny weeny companies in the first six months of this year. They spent about $70 on the pair. One was Scene7. But since they were small, the company hasn’t disclosed the name of the other one.