Dell tops HP bid for 3Par as bidding war escalates
Texas computer giant's offer edges above HP's $1.6B offer
- By David Hubler
- Aug 26, 2010
The battle of the computer giants over 3Par Inc. continues.
Dell Inc. announced today that it has raised its bid to buy 3Par to $24.30 a share, or slightly more than the $1.6 billion that Hewlett-Packard Co. offered earlier this week to counter Dell’s initial offer of $18 a share, or $1.2 billion.
3Par officials have accepted the latest offer, Dell said today in a statement.
The Dell bid values 3Par at eight times its revenue and is more than double 3Par’s share price before any bids were announced, according to Bloomberg News.
Acquiring 3Par would give the winning company a leg up in competing with rivals Cisco Systems Inc. and IBM Corp., the Bloomberg article added.
However, analysts cited by the business news agency said the bidding war is not likely over because both companies have lots of cash on hand to up the ante again for the data storage maker in Fremont, Calif.
With almost $15 billion in cash, HP will counter any higher offers from Dell, the analysts say.
Shares of 3Par fell 48 cents to $26.28 at 9:36 a.m. in New York Stock Exchange composite trading, indicating that investors also expect a higher bid, according to Bloomberg.
On Aug. 16, Dell announced that it had signed an agreement to acquire 3Par for the $18-a-share price. 3Par officials accepted that deal.
But HP then submitted a proposal to acquire all outstanding shares of 3Par for $24 a share in cash, putting the Dell deal on hold.
Dell, of Round Rock, Texas, ranks No. 11 on Washington Technology’s 2010 Top 100 list of the largest federal contractors. HP, of Palo Alto, Calif., ranks No. 12.
David Hubler is the former print managing editor for GCN and senior editor for Washington Technology. He is freelance writer living in Annandale, Va.