HP, 3PAR Acquisition Talks Begin After HP Tops Dell's Offer - Encroachment
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Tech giants such as HP and IBM Corp (NYSE:IBM) are expanding rapidly into new areas, hoping to offer more comprehensive products, but encroaching increasingly into each other's traditional markets.
3PAR is one of a few candidates that could help Dell expand from computers to corporate solutions in both software and hardware, but bids for the company already look expensive, said Jeffrey Fidacaro, an analyst at Susquehanna Financial Group, a market maker in shares of Dell.
"These are pretty high valuations to be paying for this asset, so now it comes down to who strategically needs this the most," Fidacaro added.
Dell's shares fell 3 percent, or 36 cents, to close at $11.59 on the Nasdaq stock exchange.
HP shares ended 1.7 percent lower at $38.39 on the New York Stock Exchange.
Bidding wars are rare in the tightly knit technology sector, where deals are often made behind closed doors, with a few exceptions such as the 2009 battle between Oracle Corp (NASDAQ:ORCL) and IBM for Sun Microsystems. Oracle eventually bought the computer maker for $7 billion.
For 3PAR, a deal with a large company such as Dell or HP would give it a broader sales reach, helping it compete against rival EMC and smaller players such as Isilon Systems Inc (NASDAQ:ISLN) and Compellent Technologies Inc (NYSE:CML). [ID:nN23188685]
IBM, HP and Oracle have been boosting investment in cloud computing and virtualization technology, which allows users to access data and software over the Internet and corporate networks.
3PAR is advised by veteran technology banker Frank Quattrone and his outfit Qatalyst Partners. Credit Suisse Group AG (CSGN) is advising Dell and JPMorgan Chase & Co (NYSE:JPM) advises HP. (Reporting by Soyoung Kim and Liana B. Baker and Yinka Adegoke in New York and Noel Randewich in San Francisco; Editing by Gary Hill and Dhara Ranasinghe)
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