HP, 3PAR Acquisition Talks Begin After HP Tops Dell's OfferBy Reuters | Posted 2010-08-25 Email Print
3PAR is opening its books to HP as the company begins acquisition talks with the tech giant the day after HP trumped Dell's bid for the data storage vendor.
NEW YORK/SAN FRANCISCO, Aug 24 (Reuters) - 3PAR Inc (NYSE:PAR) said on Tuesday it will start merger talks with Hewlett-Packard Co (NYSE:HPQ) after HP's $1.6 billion offer for the data storage company trumped a bid by its smaller rival Dell Inc (NASDAQ:DELL).
3PAR has determined that HP's proposal was "reasonably likely" to lead to a superior offer over Dell's $1.15 billion bid and has informed Dell of its intention to enter talks with HP, the company said in a filing with the U.S. Securities and Exchange Commission.
If 3PAR's board endorses the bid by HP, it will give Dell 3 business days to sweeten its offer, 3PAR said in the filing, adding that it has not yet made such a determination.
The filing comes a day after HP offered to buy the high-end data storage company for $24 per share, topping Dell's bid by a third in a surprise move that could spark a rare bidding war in the technology sector.
3PAR said its board met on Monday to discuss HP's offer and decided to open its books to the company.
"3PAR intends to engage in discussions with HP promptly regarding its unsolicited acquisition proposal, and share nonpublic information with HP regarding 3PAR, in order to more fully evaluate HP's proposal with a view to establishing whether it is a 'superior proposal'," the company said in the filing.
Investors have been expecting Dell to come back with a more attractive offer, but the looming bidding war raised fears that it might overpay, as the world's two largest PC makers vie for a pivotal asset to broaden their scope.
A Reuters survey of 9 fund managers and analysts on Tuesday found most expect another bid or two, and a final price of around $29 per share -- nearly three times where they were before Dell's first public offer for $18 billion a share.
Earlier on Tuesday, Bloomberg reported Dell may convey a higher offer price within days to counter HP's offer, citing a person familiar with the matter, sending its shares down 3 percent. Dell was not available for comment.
3PAR shares rose 3.6 percent to $27.04, above the $24 a share HP has offered -- which was about 33 percent higher than Dell's $18 a share bid.