The bidding war between rival PC makers Dell (DELL) and Hewlett-Packard (HPQ) over small data storage company 3Par (PAR) has heated up once again. Just a couple of hours after Dell matched HP's increased bid from late Thursday, the No. 1 PC maker raised the stakes once again, offering to acquire 3Par at $30 per share in cash, or an enterprise value of $2.0 billion. The proposal represents an 11% premium above Dell's $27 per share bid, valued at $1.8 billion from Friday morning.
While HP keeps touting its proposal as superior and says that it expects the transaction to close by the end of the calendar year, one can't help feel that the No. 1 PC maker is baiting its smaller rival. This is the third offer by HP, each following Dell's own bid with the No. 2 PC maker also reserving the right to match any competing offer, which it has done so far. 3Par's board has so far accepted all of Dell's offers.
It all started last week when Dell offered $18 a share for 3Par and has developed into an almost ridiculous bidding war between it and rival No. 1 and PC maker. A week after, HP topped Dell's offer with a 33.3% higher bid of $24 a share. Again, this was topped by Dell with a bid of $24.30 Thursday morning, only to have HP offer $27 by the end of the day. With the latest bids Friday, observers are curiously watching to see who will prevail.
Dell said in its latest statement that it "continues to believe that the acquisition of 3Par, with its industry-leading storage technology, is important to its customers and will enhance Dell's position in utility-storage solutions. Consistent with its previous rationale for the acquisition, Dell also believes that its global brand and broad global reach will dramatically accelerate 3Par's revenue growth."
Hewlett-Packard feels the same way: "The addition of 3Par's next-generation storage architecture will accelerate HP's Converged Infrastructure strategy. ... The combination will bolster HP's storage offerings and diversify its portfolio across key growth markets."
No doubt, the data storage company offers solutions both companies find appealing and complementary to their own with possibility to drive further growth -- one which they're willing to pay a premium for. But in the last quarter, 3Par's total revenue was only $53 million and just $193 million for full fiscal year 2010. 3Par shares closed at $9.65 on August 13, before the first offer by Dell on August 16.
Investing in Startups
The lucrative and risky world of startups.View Course »