HP-Dell bidding war over 3PAR heats up

By Aaron Smith, CNNMoney.com staff writer


NEW YORK (CNNMoney.com) -- The bidding war over 3PAR reached a fever pitch on Friday, as Hewlett-Packard raised its offer to $2 billion just hours after Dell matched its earlier bid.

Just before the opening bell, HP announced that it was raising its bid to $30 per share in cash, valuing the firm at $2 billion.

At about 7 a.m., Dell had announced that it had matched HP's earlier bid to buy 3PAR for $27 per share, or $1.8 billion in cash. 3PAR, a data information storage company, said it had accepted Dell's offer.

3PAR's stock price surged more than 24% as investors bet that the bidding war could drive the value of the company still higher.

But Aaron Rakers, analyst for Stifel Nicolaus & Co., doubted that the value of 3PAR would support a bid that would go much higher.

"I think we're getting to an end game at some point here," he said.

Abhey Lamba, analyst for ISI Group, said it would be difficult for the bidders to legitimize a larger offer.

"I think from a financial standpoint it's going to be very difficult for them to generation reasonable return on investment at this valuation," he said. "We do think that strategically, buying 3PAR would be good for either company. It's just the valuation that would be tough to justify."

Any offer from either computer maker would need to pass regulatory approval.

Before the bidding war, 3PAR was a relatively obscure data storage company that wasn't considered a takeover target. But 3PAR is important to the hardware rivals, which are both accelerating their cloud computing offerings for customers, which require a tremendous amount of storage capacity.

Dell and HP have been battling over 3PAR since last week, with HP besting Dell's earlier bid of $24.30 a share, or $1.6 billion, on Thursday.

The initial bid, from HP, was undisclosed, and Dell beat that bid with an offer of $1.5 billion.

The stock price for Dell (DELL, Fortune 500) rose about 2% while the price for HP (HPQ, Fortune 500) slipped about 1%.  To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,119.64 12.94 0.08%
Nasdaq 4,573.29 2.65 0.06%
S&P 500 2,000.69 0.67 0.03%
Treasuries 2.38 -0.01 -0.38%
Data as of 11:01am ET
Company Price Change % Change
Bank of America Corp... 16.31 -0.02 -0.12%
Facebook Inc 74.89 -1.07 -1.40%
Yahoo! Inc 37.99 0.20 0.53%
Apple Inc 100.81 -0.08 -0.08%
Halliburton Co 68.34 -1.47 -2.11%
Data as of 10:46am ET

Sections

Standard General, largest investor for troubled electronics retailer, in talks to give RadioShack cash infusion it needs More

If we want to narrow the wealth gap, we need a better path to homeownership for low-income families. More

Apple is expected to launch the iPhone 6 in two weeks, but waiting until then to sell your old iPhone means you're way late to the game. More

Utah State professor Michael Glauser cycled 4,000 miles this summer, visiting 100 entrepreneurs across the country. Here's a snapshot of how they grew their businesses. More

Mary Fallon, from Durham, Maine, is a mother of three children, two dogs, 25 chickens and a flock of 22 sheep. Here are journal entries from a day in her life. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.