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HP counters Dell again, raises offer for 3Par to $1.8 billionAug 26, 2010 (San Jose Mercury News - McClatchy-Tribune Information Services via COMTEX) -- Hewlett-Packard swung back at Dell on Thursday afternoon by once again raising its bid to buy the data-storage company 3Par, offering $1.8 billion just hours after Dell announced that it had raised its own bid to $1.6 billion. The latest counter-offer by Palo Alto-based HP puts the ball back in Dell's court, since it has the right to keep matching any counter-offers under the terms of its original agreement with 3Par. Dell said late Thursday that it would "assess the situation and act in the best interests of our customers and shareholders." HP's new offer amounts to $27 a share for Fremont-based 3Par. Analysts have speculated that the bidding could go higher, to as much as $30 a share. But the fact that HP has now offered a substantial increase over Dell's last two bids led one analyst to predict late Thursday that Dell may walk away from the fight. "We believe that it is now less likely that Dell will return with a competitive bid for 3Par," said Aaron Rakers at the Stifel Nicolaus investment firm, adding that it appears more likely that HP will "ultimately win this bidding war." HP and Dell are longtime rivals in the computer business, although HP has outpaced Dell in expanding beyond PCs and printers to selling a full range of data center gear, including storage and networking products, as well as tech services. Now the two big computer companies are dueling to buy the much smaller 3Par, because its innovative data-storage products are geared toward the growing market for cloud computing, in which businesses store data and software in large computer centers that users can access over the Internet. Dell and 3Par announced last week that the two had agreed to a deal in which Dell would pay $18 a share, or about $1.15 billion, to buy the smaller company. But Palo Alto-based HP came back with an offer of $24 a share Monday. Dell countered Thursday morning with an offer of $24.30 a share, but most analysts expected HP would fire back. That response came in the afternoon. Analysts say both Dell and HP have large stockpiles of cash and can readily afford the deal. But some have questioned whether they would be overpaying for 3Par, whose products are widely praised but which has not been highly profitable. 3Par's stock had been selling for well below $12 a share before Dell made its offer. In an interview earlier this week, however, HP executive vice president David Donatelli said his company can use its vast sales and supply networks to sell 3Par's products on a broader scale than 3Par has been able to achieve. HP is the world's largest tech company by annual revenue. A regulatory filing this week showed HP had made a previous offer for 3Par in July. But 3Par contacted other prospective buyers, including Dell, which exceeded HP's offer by proposing to pay $18 a share. 3Par then invited HP to raise its offer, but HP declined at that time. Contact Brandon Bailey at 408-920-5022; follow him at Twitter.com/BrandonBailey To see more of the San Jose Mercury News, or to subscribe to the newspaper, go to http://www.mercurynews.com. Copyright (c) 2010, San Jose Mercury News, Calif. Distributed by McClatchy-Tribune Information Services. For more information about the content services offered by McClatchy-Tribune Information Services (MCT), visit www.mctinfoservices.com, e-mail [email protected], or call 866-280-5210 (outside the United States, call +1 312-222-4544). |