Dell pulls out of bid battle with HP for 3Par

Published on Wednesday 1 September 2010 21:32

Dell is walking away from a bidding contest with rival Hewlett-Packard for data storage maker 3Par.

Dell said yesterday it won't match HP's offer to pay $33 per share for 3Par, or about $2.07 billion (1.34bn). Dell's decision came barely an hour after 3Par announced it had received an offer from Dell of $32 per share and then the even stronger bid from HP.

In a statement, 3Par said Dell's revised offer contained new terms that it found unacceptable, including a multiyear reseller agreement with Dell that would remain in effect even if 3Par were to be acquired by another company.

The board of 3Par deemed HP's offer superior. "We took a measured approach throughout the process and have decided to end these discussions," said Dave Johnson, Dell's senior vice-president for corporate strategy.

Shares of 3Par increased 75 cents, or 2.3 per cent, to $32.83 in early trading. Before Dell conceded, 3Par shares were trading as high as $33.84 as investors expected Dell to match or beat HP's $33-per-share offer.

Dell made the first offer for 3Par on 16 August, at $18 per share. As part of an agreement between the two companies, 3Par must pay Dell a $72 million termination fee.

Both PC makers were looking at 3Par as a way to build up their "cloud computing" businesses, delivering software, data storage and other services to customers via the Internet. 3Par could also help cut data-storage expenses.