3PAR bidding war: HP vs. Dell... FIGHT! (and b'doom, tssh)

By Richi Jennings. August 27, 2010.

The ever-escalating bidding war for 3PAR has reached $27 per share [update: now $30]. Would-be suitors HP and Dell are locked in an adversarial auction for the cloud storage vendor. Dell keeps claiming victory, but has been twice trumped by HP. In IT Blogwatch, bloggers try to keep up.

Your humble blogwatcher curated these bloggy bits for your entertainment. Not to mention b'doom, tssh...


James Niccolai paints HP and Dell as brats who can't share:

The companies are squabbling over a maker of storage arrays ... [for] virtualized environments, which would allow them ... to expand in the fast-growing market for "private cloud" infrastructure. The escalating bids point to the strategic value.


Last week ... Dell offered to buy 3PAR ... for $18 per share. ... HP made a counterbid on Monday, offering $24.00 per share. ... Dell topped that offer by $0.30 on Thursday morning, and HP ... [quickly made an] offer of $27 ... almost three times what 3PAR's shares were trading at before the acquisition battle began.

Jonathan E. Skillings exercises skill:

Shortly after the market close, Hewlett-Packard raised its bid to $27. ... HP's new offer, if it's accepted, would put the total value of a 3Par acquisition at about $1.8 billion.


[But] Dell announced Thursday morning that 3Par has acceded to the ... offer of $24.30 per share. ... 3Par said that HP's [$24] offer was likely to result in a "superior proposal" and gave Dell an ultimatum: three days to produce a better offer. ... .

Steven Mostyn explains:

If 3Par turns to a rival bid after initially accepting Dell’s offer, it will be forced to pay out some $74 million USD in compensation.


So why all the fuss over 3Par, you may be asking. ... [It's about] a technology called ‘thin provisioning’ ... whereby only as much storage space as needed is assigned at any given moment, enabling ... a significantly more efficient service whilst also cutting down on data-storage costs. ... [it] can cut storage administration costs by up to 90 percent.

  Oh, Maureen O'Gara, garners more:

Dell says 3PAR has accepted its amended offer and that if [it] ... walks away this time it's going to cost its suitor $72 million, up from the $53.5 million termination fee in their original agreement. ... The Street has frothily speculated this week that the bidding could go to $29 a share.


According to the story 3PAR told the SEC the other day HP ... was actually the first company to make an acquisition offer ... less than the $18 a share Dell eventually put on the table.

"Is Dell Done?" asks Brian Caulfield:

Probably Not. ... In fact, the rapid-fire pace could continue. ... They’ve got plenty of cash.


Both HP and Dell need 3Par. Dell needs to expand its presence in the corporate data centers. ... HP, meanwhile, already has a storage business, and is eager to grow it.


And Finally...

Two Drums and a Cymbal Fall off a Cliff

Don't miss out on IT Blogwatch:

Richi Jennings, your humble blogwatcher
  Richi Jennings is an independent analyst/consultant, specializing in blogging, email, and security. A cross-functional IT geek since 1985, you can follow him as @richi on Twitter, pretend to be richij's friend on Facebook, or just use good old email: itbw@richij.com.

You can also read Richi's full profile and disclosure of his industry affiliations.

Copyright © 2010 IDG Communications, Inc.

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