Reuters| Mon Aug 23, 2010
NEW YORK: Hewlett-Packard Co launched a $1.6 billion bid for data storage company 3PAR Inc on Monday, topping an offer by technology rival Dell Inc.
HP bid $24 a share for 3PAR, about 33 percent more than Dell planned to pay in a deal announced a week ago. At the time, Dell’s bid for 3PAR, which makes storage products that use virtualization technology to allow companies to boost efficiency, marked an 87 percent premium to its share price.
Representatives from 3PAR and Dell were not immediately available for comment on the HP move.
HP, faced with turmoil in its top ranks after the resignation of Chief Executive Officer Mark Hurd, said its board had approved the bid.
Shares of 3PAR, which was founded in 1999 and posted revenue of $194 million in its last fiscal year, jumped 37 percent in premarket trading after the HP announcement. Shares of HP slipped 1 percent.
The competing bids for 3PAR come as technology heavyweights like International Business Machines Corp and Oracle Corp have been boosting investment in cloud computing and virtualization technology, hoping to take advantage of corporate demand for services that manage the flow of data and information.
Cloud computing is technology that allows users to access data and software over the Internet and corporate networks.
Because Dell offered such a steep premium for 3PAR, industry analysts had doubted a competing offer would emerge. The boards of Dell and 3PAR had approved terms of the deal.
HP said 3PAR would be an “ideal fit” and offered terms that it said would be similar to those proposed by Dell but would not include a termination fee.
HP said its proposed deal would close by the end of the year.