HP trumps Dell's improved bid for 3PAR
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Hewlett-Packard has topped Dell's improved bid to acquire storage specialist 3PAR as the world's top two computer manufacturers battle for control over the market for advanced high-end data storage solutions.
AFP - In an intensifying battle between the world's top computer-makers, Hewlett-Packard on Thursday raised its offer to acquire data storage firm 3PAR, just hours after rival Dell topped an earlier bid.
HP announced it had boosted its offer to 27 dollars per share in cash, or for a total 1.8 billion dollars, after Dell said it had improved its offer to 24.30 dollars per share for a total 1.6 billion dollars.
HP, the world's largest computer manufacturer, said its counter offer to buy out 3PAR was not subject to any financing and had been approved by its board of directors.
"Once approved by 3PAR’s board, HP expects the transaction to close by the end of the calendar year," it said in a statement.
"Our revised proposal offers superior value to 3PAR’s shareholders, while maintaining our disciplined approach to only pursuing acquisitions that we believe will strengthen our portfolio and create long-term value for our shareholders," HP executive vice-president Dave Donatelli said in a statement.
"Not only is our offer superior to Dell’s proposal, HP remains uniquely positioned to execute on this combination given the number of synergies between the two companies."
Dell first announced on August 16 it had reached an agreement to acquire 3PAR at 18 dollars per share. Last Thursday, HP made a counter bid of 24 dollars per share in cash.
The California-based 3PAR on Tuesday gave Dell three days to revise its acquisition offer after HP's bid.
It now remained to see if Dell would strike back as the two titans struggle to gain an edge with advanced and more complex computer systems as the personal desktop and laptop market nears its peak, analysts said.
"We have an agrement with 3PAR that gives us a period of time and the right to match any offer so we'll be taking some time to assess the activity," a spokesman for Dell said.
The clash between the two rivals may reach the point where 3PAR acquisition would exceed its real value, analysts warned.
"We are getting pretty close to the limit where you can keep saying you are getting a good value. If everything goes perfectly, you can say it is at fair value, but things rarely go perfectly," said Kevin Hunt, senior technology analyst Hapoalim Securities.
"At 27 (dollars) a share it is pretty hard to imagine them going much higher, but both companies have a lot of cash so you never know.
I think much higher would be pretty hard to justify financially for share holders but companies have made bad decisions in the past, so I wouldn't rule it out."
Both Dell and HP are hoping the acquisition would offer near-exclusive control over the market of advanced high-end data storage solutions, where 3PAR is the most dominant player.
"3PAR has high-end storage systems with very fast retrieval of data. That market is anywhere between four to six billion dollars in revenue with a very high margin," Hunt told AFP.
"It is a rare opportunity to get into this market."
Dell has said that "the 3PAR acquisition complements and extends the breath of Dell's storage portfolio."
HP, in turn, said the acquisition would accelerate its so-called "converged infrastructure strategy, which provides customers with an unmatched portfolio of intellectual property across storage, server and networking solutions."
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