Dell Squeaks By HP in 3Par Acquisition

Data storage maker 3Par on Thursday accepted a sweetened offer from Dell that narrowly topped Hewlett-Packard’s bid last week.

3Par said it agreed to sell itself to the world’s third-biggest personal computer maker for $24.30 a share, just above the $24 or $1.6bn HP offered.

Dell had emerged as the winner after an initial round of bidding at $18 a share, and 3Par’s rapid acceptance of the new offer, itself disclosed only on Thursday, suggested that the target company was inclined to stick with that first choice.

“Dell’s desire for 3Par is driven, in part, by its belief that 3Par, with its architecturally superior utility storage solution, is important to Dell’s customers and will enhance its position in cloud-based storage applications,” Fremont, California-based 3Par said.

The two companies amended their initial takeover agreement, increasing the breakup fee to $72m and keeping the expiration of a cash tender offer for 3Par shares at September 20, the latest point at which HP could respond.

HP didn’t get far enough in its own talks with 3Par to have an automatic right to re-bid, according to people familiar with the discussions. HP declined to comment ahead of a board decision on whether to re-enter the fray.

Dell’s modest overbid, while more than double 3Par’s market value from before the first merger agreement, disappointed speculators who had since sent the stock flying on the bidding contest. 3Par shares slipped 1.83 per cent to $26.27 in early trading as both Dell and HP gained slightly.

Dell said it was committed to data-management offerings based on industry standards and said that “storage at the forefront of this strategy . . . Dell believes that its global brand and broad global customer reach will dramatically accelerate 3Par’s revenue growth.”

The competition over 3Par, which is not profitable, underscores a surge in technology acquisitions and the importance of data storage and analysis as big businesses shift to cloud architecture that keeps the booming amount of information they collect in remote locations.

Dell has already completed one big deal in data storage with the 2007 acquisition of EqualLogic. It has a large agreement to resell storage leader EMC’s wares, but people close to both companies said this week they expect that relationship to continue.