Hewlett-Packard wins bidding war for 3Par
Computer maker Dell Inc. withdrew Thursday from the three-week bidding war over tiny data storage company 3Par Inc., which quickly accepted the latest offer at $33 a share from Dell rival Hewlett-Packard Co.
HP’s final bid, which values the Fremont, Calif., company at $2.4 billion, came Thursday morning. Dell wasted little time responding: An hour later, it threw in the towel.
Dell started the bidding Aug. 16 with an offer of $18 a share, or about $1.13 billion. HP, looking to expand beyond its basic manufacturing line, quickly upped the ante, and the subsequent tug of war turned 3Par into a sweetheart.
With barely $200 million in annual sales, losses in each of its three years as a public company and a stock price stuck below $10 a share, 3Par seemed an unlikely prize.
But each bidder saw the acquisition as a way to provide less expensive data storage while building build their so-called cloud computing businesses, which gives customers software, data storage and other services over the Internet.
For HP, the premium was apparently worth it. The company has endured falling prices for personal computers, though it remains the world’s leading manufacturer, and was looking for ways to take advantage of a technology world that increasingly relies on fast, Internet-based services.
“It looks like an extremely expensive acquisition,” said Aaron Rakers, an analyst at Stifel Nicolaus & Co. “But at the end of that day, neither H-P nor Dell had products in this category, and it fits.”
HP also will get a bit of a return quickly. 3Par’s $104 million in cash and short-term investments will fall into HP’s balance sheet.
3Par’s revenue grew slightly, to $203 million, over its previous four quarters, but that barely registers on HP’s bottom line: The computer maker takes in close to $30 billion a quarter.
Still, the move was seen as a way for HP to use its marketing muscle to boost sales for 3Par, which builds server-level computers that can host the huge amounts of data and heavy-duty online services that power big Internet companies.
Dell, also looking to jump into that market, will have to keep looking.
“We took a measured approach throughout the process and have decided to end these discussions,” said Dave Johnson, the company’s senior vice president for corporate strategy.
3Par’s shares rose 80 cents, or 2.5%, to $32.88. HP gained 47 cents to $39.68, and Dell was up 24 cents, or 2% to $12.36.
