3Par acquisition: Dell increases their offer to trump HP

August 27th, 2010 - 03:24 am ET by C. D.

The fight to buy 3Par is on with Dell having made a new offer of $24.30 per share, slightly higher than HP’s offer made a few days ago, tipping the scales back in their favour.

Logo Dell ProThe race for 3Par, a storage and virtualisation specialist is well and truly on between Dell and HP, with both interested in acquiring the company to reinforce their cloud computing server activities.

Dell opened the bidding by offering 1.15 billion dollars, equivalent to 18 dollars per share. Purchasing 3Par will increase their server options by offering services associated to virtualisation and cloud computing.

This wasn’t taking into account the fact that HP, global leader for server sales, would also make an offer so that they can provide ready to go solutions which combine both hardware and software. The group already purchased network equipment manufacturer 3Com in 2009, which allowed them to increase the presence of HP Networking, with the acquisition of 3Par aimed at reinforcing this strategy.

Will Dell have the final word?
hp-logoThey therefore trumped Dell by offering 24 dollars per share, an amount representing approximately 1.6 billion dollars. While HP appeared to be confident by offering a price a lot higher than their competitor, with the two boards of directors having approved the deal, observers were nevertheless awaiting Dell’s reaction.

This only took a few days to appear: Dell replied by announcing their intention of paying 24.30 dollars per share, slightly higher than HP’s offer, while still valuing the deal at around 1.6 billion dollars.

Dell indicates that their first offer was already ratified by 3Par’s board of directors and that this new offer is a simple amendment which keeps the initial conditions.

"With the acquisition of 3Par, Dell will have a wide range of storage solutions which differentiate them from the market", indicates Dave Johnson, vice-president of Dell’s Enterprise strategy. This solution is aimed at providing more affordable solutions for data centres, so we will now need to see if HP comes back to the table. If they don’t, they will still have managed to push Dell to increase their initial offer by 35%...

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