Palm said on Wednesday that it would buy Handspring in an a stock deal valued at about US$169 million. Palm’s board also approved the spin-off of its PalmSource unit, which makes the operating software for its handhelds. “Following the spin-off of PalmSource, Handspring shareholders will receive 0.09 of a Palm share for each share of Handspring common stock,” according to Reuters. “Palm plans to issue 13.9 million common shares to Handspring holders, after the spin-off of PalmSource. Based on Tuesday’s closing price of $12.15, the shares would be worth about $169 million. The combined company is expected to cut 125 jobs and expects $25 million in annual cost savings.”