HP tops Dell’s offer for 3Par
Two tech giants in the PC field are battling to take over a relatively tiny company in the burgeoning arena of cloud computing.
Hewlett-Packard Co., the largest PC company in the world, bid $1.6 billion, or $24 a share, Monday for 3Par Inc., a firm that makes products to increase the efficiency of data stored on remote, massive servers accessed through the Internet.
Last week, Dell Inc., the second-biggest PC company, bid $1.13 billion, or $18 a share, for 3Par.
HP’s bid is probably not the last skirmish. Shares of 3Par shot up $8.05, or 44.6%, on Monday to close at $26.09 -- higher than the HP bid price -- indicating that Wall Street expects Dell to fire back with a better offer.
“At first, our big concern as investors was ‘Is Dell paying too much for 3Par?’ And I guess the answer is no,” said Kim Caughey, a tech analyst at Fort Pitt Capital Group, which owns some stock in Dell. “I’m guessing they’ll make another offer, and who knows what it’ll be.”
Neither Dell nor 3Par would comment Monday on the HP offer.
The competition over the purchase of 3Par, based in Fremont, Calif., is indicative of a changing market in the PC industry, Caughey said. Along with many other tech giants, HP, based in Palo Alto, and Dell, based in Round Rock, Texas, have been looking to expand their businesses beyond a softening personal computer market as prices fell and consumers turned to smart phones and other devices for their computing needs.
Last week, Intel Corp. -- the biggest maker of chips that go into PCs -- bought anti-virus software maker McAfee Inc. for about $7.7 billion in a move many analysts saw as an attempt at diversification.
In April, HP bought smart-phone maker Palm Inc. for $1.2 billion, in large part for its WebOS operating system, which could make its way onto tablet computers and other mobile devices.
Last year PC sales accounted for less than a third of HP’s $116-billion annual revenue, while at Dell, PC sales made up about half of its $52.9 billion in sales. 3Par’s revenue for the year was $194.3 million.
HP has been in the news of late, but not for a reason the company liked. On Aug. 6, Chief Executive Mark Hurd resigned after an investigation into his relationship with a marketing contractor. In Hurd’s five years at the head of the company, HP’s market value nearly doubled, to $100 billion.
An HP spokeswoman, who asked that her name not be used because she was not authorized to speak on the subject, said the company began planning the 3Par bid during Hurd’s tenure.
If HP hopes to keep its growth on track, said independent tech analyst Phil Baker, it needs a stronghold in the rapidly emerging field of cloud computing, which allows data to be stored far from a company.
3Par makes software that can increase available space on a remote server using a technique called thin provisioning.
“This is not just about having a bank of servers; it’s about the software 3Par has developed that can allow you to access data quickly,” Baker said.
HP shares on Monday fell 81 cents, or 2%, to $39.04. Dell shares slipped 13 cents, or 1%, to $11.94.
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nathan.olivarezgiles@latimes.com
