I have to admit earlier this week I thought Hewlett Packard’s (HP) move to outbid Dell for 3PAR was more a competitive jab than anything else. Last week Dell and 3Par came to terms for a $1.15bn deal but HP jumped in the game on Monday this week with a significantly larger offer bringing the deal to $1.53bn. I’m sure that increase didn’t get Michael Dell’s week off to a good start. Dell countered with a modest increase this morning of .30 cent per share bringing the deal to $24.30 a share or $1.6bn and announced that 3PAR had accepted the deal. Not to be outdone HP countered late this afternoon raising the deal to $27.00 a share and a total deal size of roughly $1.8bn. It seems clear at this point that HP really wants this deal and must see it as a strategic purchase.
3PAR is a utility computing company supplying IT organizations software and hardware services through server and storage virtualization. The acquisition would become an important part of Dell’s overall enterprise computing, cloud and services strategy.
It will be interesting to see what happens on Friday. Stay tuned…..
UPDATE – Friday morning is off to an exciting start for HP, Dell and 3PAR. Dell matched the HP offer of $27.00 per share early this morning. Not to be out done HP countered two hours later by rounding up to $2bn or $30.00 per share. There is some commentary in the market that Dell may be nearing its limits bottom line HP has more money on hand and can win the bidding war. The question is at this point its clear that whoever wins will pay a huge premium over 3PAR’s actual value and that could become a concern for all involved especially share holder in HP and Dell.
UPDATE 9/2/2010 at some point yesterday DEll came back to the table and matched the $2bn offer from HP but it didn’t take long for HP to jump the deal back up and it appears that Dell has had enough. HP’s last offer moved the deal to $2.4bn and by most accounts DEll has announced that its done and will not counter the offer. I guess it pays to have deep pockets and it was clear last week that the deal as HP’s to loose. Dell has wasted a lot of time, energy and money losing this deal and it leaves them in a bad spot competitively with HP and others in the space. The big winner here is 3PAR shareholders who have seen their stock more than triple this past two weeks.
LINKS: Here’s a great piece on why they are battling for 3PAR