HP raises the stakes in bid­ding war for 3Par

The Scotsman - - Comment - VIC­tO­rIa tHOM­SON

THE bat­tle for a US data stor­age firm took two fur­ther twists yes­ter­day as Hewlett Packard raised its of­fer for 3Par to $2 bil­lion, once again top­ping Dell’s bid and show­ing it had plenty of am­mu­ni­tion in the bid war.

HP’s of­fer of $30 per share came less than three hours af­ter Dell an­nounced 3Par had ac­cepted its bid of $27 per share which matched HP’s pre­vi­ous of­fer. Dell’s agree­ment with 3PAR al­lows it to match com­pet­ing bids, but an­a­lysts say HP may be the stronger player with $115bn in an­nual rev­enue com­pared with Dell’s $53bn.

3PAR shares surged 20 per­cent to $31.29 in early trade. The bid­ding war has raised 3Par’s val­u­a­tions to what some an­a­lysts see as un­rea­son­able lev­els. Dell’s first pub­lic of­fer was $18 per share.

The rapidly es­ca­lat­ing bids for 3PAR come as Dell, HP and other large technology ven­dors like IBM and Cisco Sys­tems have been ex­pand­ing into new tech­nolo­gies to of­fer cor­po­rate clients a wider range of prod­ucts and ser­vices, in­clud­ing “cloud com­put­ing” – an in­creas­ingly pop­u­lar technology that en­ables com­puter users to ac­cess data and soft­ware over the in­ter­net, al­low­ing com­pa­nies to cut costs.

Au­gust has been a par­tic­u­larly ac­tive month for deals. In­tel bid $7.7bn for se­cu­rity soft­ware maker McAfee last week.

But an­a­lysts say the bid­ding war over 3Par has driven up val­u­a­tions, rais­ing the risk of the buyer over­pay­ing. An­a­lysts say at cur­rent bids, 3Par is val­ued at around eight times sales.

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