Dell Responds to HP by Upping Its Offer for 3PAR by $100M

By Chris Preimesberger  |  Posted 2010-08-26 Print this article Print

3PAR and Dell signed an amendment to their previously announced agreement of Aug. 16 reflecting the new offer price of $1.6 billion; there was no immediate response from HP.

Three days after rival Hewlett-Packard tendered a $24-per-share, $1.5 billion offer to acquire enterprise storage maker 3PAR, Dell on Aug. 26 raised the stakes by about $100 million, upping its offer to $1.6 billion, or $24.30 a share.

3PAR said its board of directors approved the proposal. 3PAR and Dell signed an amendment to their previously announced agreement of Aug. 16 reflecting the new offer price and a revised termination fee of $72 million.

There was no immediate response from HP early on Aug. 26.

3PAR, located in Fremont, Calif., and employer of about 600 people, originally made its reputation by delivering a scalable, dependable thin-provisioning feature. It is a hot storage property because its clustered, utility-type architecture is tailor-made for cloud systems that deliver software as a service, and cloud storage systems are in demand at this time.

HP already has a scale-out-type storage acquisition in iSCSI specialist Lefthand Networks, which it bought in October 2008 for $360 million. The Lefthand acquisition mirrored the 2007 pickup of iSCSI storage maker EqualLogic by Dell.

Storage product choice is clearly behind this bidding war. Both HP and Dell already have among the world's largest catalogs of storage hardware and software, but the high number of enterprises refreshing all or part of their data centers at this time is pushing system vendors to add more options in order to satisfy demand.

"We're seeing increasing demand for a new class of storage," Brad Anderson, senior vice president of Dell's Enterprise Product Group, said during a recent conference call. "For businesses and models that provide storage as a utility, we think 3PAR is a fantastic addition to that lineup."

HP Executive Vice President Dave Donatelli said on Aug. 23, "From my perspective, a 3PAR ... is a company that has good technology but does not have the ability to bring it to market."

HP can bring 3PAR's wares to market directly, through channel partners or through the HP services group, Donatelli said.

3PAR's stock was selling at just over $26 by midday Aug. 26, down about 2 percent on the day. Until the bidding war began a few weeks ago with HP's original offer, 3PAR's stock had sold for under $10 for more than a year.

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 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 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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