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| HP tops Dell in 3Par bidding |
| Bloomberg / New York Aug 28, 2010, 00:13 IST |
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Hewlett-Packard Co topped Dell Inc in the bidding for 3Par Inc for the third time, agreeing to pay $30 a share or $2 billion for the data-storage provider.
Dell said today it would pay $27 a share for 3Par, matching Hewlett-Packard’s previous bid. Dell said in a statement that its earlier bid had been accepted by 3Par’s board. Dell started the public bidding at $18 a share on August 16.
“They’re playing hardball,” Aaron Rakers, an analyst at Stifel Nicolaus & Co said in an interview. “Both these guys have something to prove.”
HP’s latest offer represents an 11 per cent premium over Dell’s bid this morning and is not subject to outside financing, HP said in its statement. Under its agreement with 3Par, Dell has the opportunity to match other acquisition offers, and Dell will be paid a termination fee of $72 million if 3Par accepts an alternative offer.
The escalating bids have boosted the proposed price to about ten times the annual revenue of 3Par, which has lost money every year since going public in 2007. The premium reflects the urgency for both companies to use acquisitions to fuel growth and expand beyond personal computers.
In addition to strengthening its storage offerings, HP wants to show it can win the deal after losing its chief executive officer, Rakers said. Former CEO Mark Hurd exited on August 6, following a probe that found he filed inaccurate expense reports to conceal a personal relationship with a marketing contractor.
3Par climbed $5.49, or 21 per cent, to $31.53 at 10.01 am in New York Stock Exchange composite trading. The shares closed at $9.65 on August 13, the last trading day before Dell’s first agreement was made public.
3Par, based in Fremont, California, sells hardware and software that make it easier and cheaper to store information.
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