Bidding War Between Dell and HP over 3Par Continues

Posted by on Aug 27, 2010 | No comment

In another move in the dog fight between HP and Dell over 3Par, Hewlett Packard boosted it’s bid for 3Par to $30.00 a share, or about $1.88 on today. This move comes directly after Dell, the other dog in this fight, matched HP’s previously increased bid to $27.00 a share, valued at $1.8 billion earlier this morning. The bidding war, which is a rare site for computer companies, began earlier this week when HP came over the top of Dell with a bid at $24 a share for 3PAR, besting Dell’s $18-per-share offer. When news broke about HP’s offer, Dell struck back with an offer of $24.30 per share, and a termination fee increase from $53.5 million to $73 million. This game of one-ups-man-ship has HP as the favorite with its massive $115 billion in annual revenue compared to Dell’s seemingly meager in comparison $53 billion annually.

Both companies clearly have plans for 3Par and believe that its acquisition would be of serious benefit to their company. The heated battle for 3Par is centered around its cloud-based storage applications, “which enable IT organizations to deliver software and hardware as a service, offering a storage infrastructure platform for highly-virtualized data centers and cloud computing.”

Shares of HP have been dropping since the beginning of the month, well before this bidding war began, down from a high of $47.56 to as low as $37.36. Dell’s shares have also seen better days though its dip hasn’t been as pronounced as HPs. Dell shares are down from $13.61 in the beginning of August to a low of $11.59. While the share price of Dell and HP, two of the largest computer makers in the world have dropped, the biding price for 3Par is now more than eight times its $240 million annual revenue. HP and Dell must have big plans and high expectations for a company that has lost money every year since issuing their IPO in 2007.

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