Three's a crowd
The bidding war between HP and Dell for virtualised storage company 3PAR culminated yesterday, with HP's offer of $33 per share proving too rich for Dell's blood.
When we last looked at it, HP had raised its bid to $30 per share and there had been no immediate response from Dell. According to a 3PAR press release Dell had come back with a $32 per share offer, which included some additional measures apparently designed to poison the well for HP should it out-bid Dell once more.
Not only did it propose an increased termination fee of $92 million, but also a multi-year reseller agreement, including fixed pricing, which would still apply should HP end up with 3PAR. The 3PAR board deemed that proposal to be unacceptable, presumably having received HP's final counter-offer before it even had to seriously contemplate Dell's one.
Dell still gets the previously agreed $72 million break-up fee and, of course, gets to spend its $2 billion or so on something else. 3PAR ended up costing more than three times more than its market value before Dell's first offer. "We took a measured approach throughout the process and have decided to end these discussions," said Dave Johnson, SVP of corporate strategy at Dell.
"HP and 3PAR is a winning combination that will accelerate HP's Converged Infrastructure strategy and bolster our ability to provide customers with the industry's highest levels of performance, efficiency and reliability," said Dave Donatelli, EVP and GM of enterprise servers, storage and networking at HP.
"As part of HP, 3PAR's agile, efficient storage solutions will truly thrive, particularly given HP's ability to accelerate investment in our products and reach new customers around the world," said David Scott, president and CEO of 3PAR.
HP is generally considered to be a better fit for3PAR, as it has much more of a presence in the high-end enterprise services market than Dell. Strategically, Dell was presumably hoping to change that with the 3PAR acquisition, but it would have taken it a long time to achieve ROI on acquiring 3PAR at such a premium.
Investors in both companies seem reasonably happy with the outcome, with HP's share up a percent yesterday and Dell's up by nearly two. As for 3PAR investors - it's party time.
