Palm scouting for a buyer

Palm is using Goldman Sachs and Quattrone's Qatalyst Partners to help it find a potential buyer for the ailing business.

Sources said HTC and Lenovo haven't put money on the table yet but might make an offer for the company.

No one has made any official announcements on the sale of Palm but speculation is rife that talks are already underway to take it over.

Buyers would get a company that develops its own OS, PDAs and web software, but strong competition from Google and Apple has taken a big chunk of Palm's market share.

However, Palm's stock rose on word on the buyout and analyst quotes suggest there's still some meat on the bones.

"Palm still has quite a good brand in the US market, and some strong technology, so you can do something with it," said Frank He, technology analyst at BOC International Holdings.

"The shares have gone down a lot and the company may become attractive to anyone looking for a turnaround play," he added.