HP wins 3PAR bidding war after Dell drops out

NEW YORK (CNNMoney.com) -- The 3PAR bidding war finally came to its conclusion Thursday after Dell conceded victory to Hewlett-Packard.

The winning bid was HP's offer of $33 a share, or $2.1 billion -- a stunning 242% premium over the value of 3PAR's stock before the bidding war between Dell and HP began on Aug. 16.

That was too rich for Dell's blood, the company said.

"We took a measured approach throughout the process and have decided to end these discussions," Dave Johnson, Dell's senior vice president of corporate strategy, said in a prepared statement.

3PAR had previously notified Dell that it would go with HP's offer of $30 a share, made Aug. 27, but Dell came back with a revised offer of $32 a share. HP then topped that offer with a bid of $33 a share, or $2.1 billion, 3PAR said Thursday.

Dell had three days to match or improve upon HP's bid, but it opted instead to end its pursuit. 3PAR now owes Dell a $72 million breakup fee to terminate its earlier agreement with Dell.

Dell attempted to negotiate a higher termination fee of $92 million in its latest bid, but 3PAR actually never accepted that offer, calling some of its terms "unacceptable."

The latest offers represented the eighth and ninth bids for 3PAR between the two tech giants. Dell's first bid, for $18, came three weeks ago, kicking off a fierce bidding war.

Dell and HP had both sought out 3PAR for its portfolio of high-end data storage technology, which is a necessary component of the high-growth cloud computing business. Cloud computing enables companies to remotely access applications stored and managed in off-site data centers. The process is cheaper and more efficient than traditional models.

Both Dell and HP license others' technology for their cloud computing offerings. They saw 3PAR as a relatively cheap acquisition and the easiest way into a high-growth business. But the company quickly grew much more expensive.

Shares of HP (HPQ, Fortune 500) rose 1%, and Dell's (DELL, Fortune 500) stock also rose 1% after falling earlier in the day. Shares of 3PAR (PAR) rose 2% to $32.83 after rising as high as $33.84 Thursday morning.