Bidding war for 3Par escalates
Hewlett-Packard Co. raised its offer for data-storage company 3Par Inc. to $1.8 billion on Thursday, besting a $1.6-billion bid by Dell Inc. that came just hours earlier in a rapidly escalating bidding war.
Shares of 3Par, considered a crucial strategic asset by both firms as they shore up their corporate-solutions businesses, leaped 6% after hours. They had fallen 2.7% during the regular session on disappointment that Dell’s revised offer, announced Thursday morning, came in just a sliver above HP’s first bid.
HP, which analysts say has the upper hand because of its much larger revenue and cash position, is now offering $27 a share in cash, trumping Dell’s latest offer of $24.30 a share.
Dell’s counter was just 30 cents a share above HP’s opening bid. Some analysts had said that meager difference suggested the Texas PC maker may give up if HP were to counter with a much higher price.
HP, with $115 billion of annual revenue compared with Dell’s $53 billion, is widely expected to have the advantage.
“Even though Dell has the balance sheet to step up the offer, they’re probably reaching the upper limits of what they can offer,” said Rodman & Renshaw analyst Ashok Kumar. “At the end of the day, Hewlett-Packard is in a better position to close the deal.”
3Par had said Thursday morning it accepted Dell’s offer and that the two companies raised their termination fee to $72 million from a previous $53.5 million.
The pursuit of 3Par comes as HP and Dell, as well as other large technology vendors such as IBM Corp. and Cisco Systems Inc., are trying to expand into new products and services.
3Par specializes in high-end data storage, a key part of “cloud computing” — an increasingly popular technology that enables computer users to access data and software over the Internet, allowing companies to save costs.
The company competes with EMC Corp. as well as IBM and other data-storage companies, and 3Par’s expertise in the high end has made it particularly attractive.
Dell shares closed at $11.75 but dipped to $11.70 after HP’s latest bid. HP shares closed at $38.22 and were little changed in late trading.
Bidding wars are rare in the tight-knit technology sector, where deals are often made behind closed doors.
In the last notable bidding war in the tech industry, EMC outbid NetApp Inc. last year to buy Data Domain Inc. for $2.1 billion. Data Domain was advised in that deal by Frank Quattrone, the same veteran technology banker who is advising 3Par in the latest negotiations.
