Bidding War Goes to Next Level as HP Ups Ante for 3PAR
Hewlett Packard raised it's bid for 3Par to $30.00 a share, or about $2 billion on Friday. This comes after Dell matched HP's previously increased bid to $27.00 a share, valued at $1.8 billion earlier this morning.
This is a contested situation where you want to maintain being the superior bid, if you will.
Both HP and Dell are clearly saying that 3PAR is a strategic asset for the company.
The battle for 3Par is driven by 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.
Hewlett Packard, whose $115 billion in annual revenue compared with Dell's $53 billion, has the firepower to increase its bid further but must also keep an eye on the richer valuation of the data storage company.
JPMorgan Chase is HP’s investment bank on the deal, and Cleary Gottlieb Steen & Hamilton is its legal adviser.
Dell still has a termination fee or break up fee of $72 million, which is payable in the event that 3Par receives and accepts another unsolicited acquisition proposal that its board determines to be superior to Dell's increased offer.
How, if at all, does the uncertainty in the HP executive suite play into this? The company doesn't have a permanent CEO since Mark Hurd's scandal.
So far it doesn't appear to affect their decision making. In fact, they've got an executive in charge of this particular area of bidding. (More about Hurd's departure and severance pay here)
The bidding war, a rare occurrence in the tech sector, started earlier this week when HP bid $24 a share for 3PAR, topping Dell's $18-per-share deal.
Dell responded by striking a new deal with 3PAR at $24.30 per share and increasing the termination fee to $72 million from $53.5 million.
That prompted HP to come back with a $27 per share bid on Thursday. Stay tuned...
Reuters contributed to this latest post.
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