H-P Appears Victorious after Dell Pulls Out of 3PAR Bidding War

It appears that the intense bidding war for 3PAR could finally be coming to an end after weeks of feverish bids from both Dell and Hewlett-Packard (News - Alert), with H-P now appearing to be the victor for the hotly contested company which makes storage products for cloud computing.

Dell called it quits after H-P raised its offer for 3PAR to roughly $2.1 billion, representing $33 per share, an increase from the prior offer of $30 per share.

3PAR issued a statement today which called the new offer from H-P a “superior proposal.”

In addition, 3PAR said it had notified Dell (News - Alert) of its intention to terminate the merger agreement with Dell immediately, in order to enter into a merger agreement with HP.

Dell announced today that it will not increase its most recent proposal to acquire 3PAR, and that Dell has ended its discussions regarding a potential acquisition of 3PAR.

Dell is entitled to receive a $72 million break-up fee from 3PAR upon the termination of its merger agreement.

Dell confirmed that its “final offer” to acquire 3PAR was not accepted by 3PAR’s board of directors. Dell’s final offer included a proposed commercial relationship and an increased break-up fee.

“We took a measured approach throughout the process and have decided to end these discussions,” Dave Johnson (News - Alert), Dell’s senior vice president, corporate strategy, said in a statement today.

“We will continue to put the interests of our customers and shareholders at the forefront of all our decisions,” added Brian Gladden, Dell’s chief financial officer. “Our focus is to create long-term value.”

Dell initially announced an agreement to buy 3PAR for about $18 a share. On Aug. 23, H-P responded with its offer of $24 a share, which was raised twice last week as the intensity of the bidding process grew.

The bidding war had led to a much larger price for 3PAR shares, which legal experts have said is one of the goals of the board of directors of a targeted company, in order to benefit its shareholders.

H-P issued a statement today that it was increasing its offer to acquire all of the outstanding shares of 3PAR Inc. for $33 per share in cash.  HP’s offer is scheduled to expire on Sept. 24, 2010.