Elevated Dividend Recapitalizations

The pickings must be getting slim for Bono-populated Elevation "We aim to help media and entertainment businesses create and market great content and insure it reaches the widest audience possible" Partners.  It is hard to find any other viable way to explain their minority PIPE transaction resulting in a 25% stake in Palm, Inc. (hardly a media or entertainment business), particularly given that the use of funds "plus $400 million in borrowed money" is "to pay shareholders a $9 per share dividend."  (Around $940 million).

Of course, the dividend recap is a regular feature of corporate finance, but for Palm's part, doing it with such a large chunk of equity seems unduly expensive.  Elevation actually permitting this kind of use of funds in a company that is about to face a burning R&D need in the face of the availability of the iPhone and the competitive reactions of other smartphone makers thereto, is just daft.

But then, Elevation can probably compel Forbes to write nice articles about their newly "revamped" Treos.