3PAR Accepts HP's $2 Billion Acquisition Bid

By Chris Preimesberger  |  Posted 2010-08-28 Print this article Print

UPDATED: The $30-per-share offer all but ends the four-day bidding war with Dell for the utility storage provider. 3PAR and HP shareholders still need to approve the acquisition.

3PAR's board of directors late Aug. 27 accepted the unsolicited proposal by Hewlett-Packard earlier in the day to acquire their company for $2 billion.

The $30-per-share offer all but ended the four-day bidding war for the utility storage provider. 3PAR and HP shareholders still need to approve the acquisition, a voting process that could take several days to weeks to accomplish.

There was no immediate word from Dell about the development by 12:30 a.m. Pacific time Aug. 28.

In accepting HP's offer, 3PAR's board elected to terminate its original Aug. 23 merger agreement with Dell in lieu of HP's all-cash offer. If the HP offer stands as final, 3PAR-according to its original agreement with Dell-will have to pay Dell a $72 million termination fee.

The 3PAR board said in a corporate statement that the HP offer constituted a "superior proposal as that term is defined in 3PAR's previously announced merger agreement with Dell" announced Aug. 16.

The Dell versus HP bidding war for the 600-employee enterprise storage company based in Fremont, Calif., took two huge steps only minutes apart Aug. 27.

3PAR received an offer from Dell matching HP's $1.8 billion bid and accepted it, apparently ending the four-day-long, high-stakes bidding war between the two IT superpowers.

Then, almost as soon as the word went out about the apparent end to the bidding process, HP came back with yet another whopping offer, this time for $2 billion, which at $30 per share is about 11 percent higher than Dell's last bid of $27 per share (and $1.8 billion overall).

The final HP offer of $2 billion values 3PAR at some 300 times the company's earnings before interest, taxes, depreciation and amortization during the past year, according to Bloomberg financial data. 3PAR's entire market cap is $1.63 billion.

For the record, the bidding had gone this way: HP made the original approach to 3PAR a few weeks ago at unannounced terms. Dell countered on Aug. 16 with a $1.15 billion bid; HP followed with $1.5 billion, Dell with $1.6 billion, HP with $1.8 billion, capped by Dell's "final" $1.8 billion offer.

Then came the $2 billion-and apparently final-bid from HP, which according to its latest balance sheet currently carries more than $11 billion in cash. Dell reported $7.7 billion in cash reserves in its most recent financial report.

HP does all this without a CEO

An interesting sidebar within this bidding process is that HP carried out its part of the tug of war without an acting CEO.

Former CEO Mark Hurd resigned on Aug. 6 following a sexual harassment claim by former actress and HP event greeter Jodie Fisher. An internal probe said it found no evidence to support her claim but discovered he had filed inaccurate expense reports to conceal a personal relationship with Fisher.

Hurd's severance package gives him until Sept. 7 to exercise options to buy 775,000 common shares. Hurd's "golden parachute" also gave him $12.2 million in cash.

See these other eWEEK stories for a full accounting of the spectacular bidding war between the two IT superpowers:

HP Explains Motives Behind Its Offer for 3PAR

Dell Cloud Storage Chief Explains Scramble for 3PAR

Why 3PAR Is Such a Hot Property

Editor's note: This story has been updated to add detail about former HP CEO Mark Hurd.

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on Salesforce.com and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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