HP offers $1.6 billion against Dell’s $1.3 billion to acquire 3PAR

HP outbid Dell over acquiring Fremont, California-based data storage company, 3PAR. Last week, Dell offered to acquire 3PAR for a price of $1.3 billion, which many thought to be very high, but HP on August 23, 2010, came up with a higher acquisition offer of $1.6 billion, exactly three weeks after its chief executive, Mark Hurd, was forced to resign over allegation of sexual harassment.

Regarding HP’s offer, Dave Donatelli, HP's executive vice president of Enterprise Servers, Storage and Networking, said, "HP's proposal offers superior value to 3PAR's shareholders. Our global reach, strong routes to market and commitment to innovation uniquely position HP as the ideal fit for 3PAR,"

HP agreed to pay $24 per share, a 33.3 percent premium, against the price offered by Dell’s $18 per share submitted on August 16, 2010. This bid resulted into a 38.6 percent surge in 3PAR share prices to $25 while HP shares declined 0.9 percent to $39.51 and Dell increased 0.3 percent to $12.11.

Brent Bracelin, Analyst, Pacific Crest, on his note said that 3PAR as an exceptional firm, which despite incurring financial losses had been able to compete with top storage providers like EMC and HITACHI. Regarding HP’s offer, Brent also said that HP had been too distracted with Hurd’s departure and did not focus much on the acquisition offer.