Dell Sweetens 3PAR Bid Above HP's OfferBy Reuters | Posted 2010-08-26 Email Print
Dell came back with a better offer for data storage company 3PAR at $1.6 billion, beating HP's current offer. Some expect HP will push its bid even higher.
NEW YORK, Aug 26 (Reuters) - Dell Inc (NASDAQ:DELL) raised its bid for data storage company 3PAR Inc (NYSE:PAR) to $1.6 billion, offering a slightly higher price than rival bidder Hewlett-Packard Co (NYSE:HPQ) in an unfolding tech industry bidding war.
Dell's latest offer comes in at $24.30 a share, which is 30 cents a share above HP's bid. Dell said in a statement on Thursday that 3PAR's board had accepted the offer.
Following Dell's sweetened bid -- it first bid $18 a share earlier this month -- shares of 3PAR dropped about 1 percent to $26.50.
The stock market's reaction suggests that some expect the bidding war to continue, but that they may have been looking for an even higher bid from Dell today.
A recent survey by Reuters of nine fund managers and analysts found that most expect another bid or two, and a final price of about $29 per share.
The pursuit of 3PAR comes as HP and Dell, as well as other large technology vendors such as International Business Machines Corp (IBM.N) and Cisco Systems Inc (NASDAQ:CSCO), vie to sell a wider array of products and services and invest in new technology.
3PAR specializes in high-end data storage, a key part of "cloud computing" -- an increasingly popular technology that enables computer users to access data and software over the Internet, allowing companies to save costs.
HP was not immediately available to comment on the revised Dell bid for 3PAR.
Bidding wars are rare in the tightly knit technology sector, where deals are often made behind closed doors.
In the last notable bidding war in the tech industry, EMC outbid NetApp last year to buy Data Domain for $2.4 billion. Data Domain was advised in that deal by Frank Quattrone, the same veteran technology banker who is advising 3PAR in the latest negotiations.
Dell shares rose 1.2 percent in early trade. (Reporting by Paul Thomasch; editing by John Wallace, Dave Zimmerman)