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Battered in the tough, competitive market for smartphones, Palm today agreed to sell a 25 percent stake to private equity firm Elevation Partners; under a recapitalization plan that will bring former Apple executives into the mix.

Should the deal close in Palm's third calendar quarter, Jon Rubinstein, former senior vice president of hardware engineering and head of the iPod division at Apple, will join Palm as executive chairman of the board. Fred Anderson and Roger McNamee, managing directors and co-founders of Elevation—named after the U2 song and in which Bono is a partner—will join Palm's board of directors.

With the impending appointment of Rubenstein, Palm will look to capture some of the iPod magic the engineer conjured at Apple. According to a Palm statement, Rubenstein was "instrumental in conceiving the iPod" and also infused USB and Wi-Fi into Apple's Mac PCs. Anderson also worked at Apple as CFO until 2004, and is credited with its financial turnaround, including solving a liquidity crisis.

"These guys [Rubenstein, McNamee and Anderson] are well-regarded in Silicon Valley, and they could help Palm break out of the catatonic spell that has engulfed their hardware engineering team," Todd Kort explained to internetews.com. "They replace some dead wood on Palm's board of directors with people with fresh ideas and a strong track record of achievement."

All evidence indicates Palm is trying to avoid a buyout.

Investors greeted Palm's recapitalization news favorably, with shares trading up this morning trading.

Adapted from internetnews.com