HP outbids Dell to pay $2.4 billion for 3Par
Computer maker Dell Inc. withdrew Thursday from the three-week bidding war over tiny data-storage company 3Par Inc., which quickly accepted the offer of $33 a share from Dell rival Hewlett-Packard Co.
HP's final bid -- which values the Fremont, Calif., company at $2.4 billion -- came early Thursday. Dell wasted little time responding: An hour later, it threw in the towel.
The bidding started Aug. 16 with Dell's initial offer of $18 a share, or about $1.13 billion. Several more bids came in rapid succession from both companies, and 3PAR was a sudden sweetheart.
With barely $200 million in annual sales, losses in each of its three years as a public company and a stock price stuck below $10 a share, 3Par seemed an unlikely prize. But each bidder saw its operations as a way to help provide less-expensive data storage and to build up the cloud computing business, which gives customers software, data storage and other services over the Internet.
3Par also has $104 million in cash and short-term investments, which will fall into HP's balance sheet.
"It looks like an extremely expensive acquisition," said Aaron Rakers, an analyst at Stifel Nicolaus & Co. "But at the end of that day, neither HP nor Dell had products in this category, and it fits."3Par's revenue grew slightly, to $203 million, in the most recent four-quarter period, but that barely registers on HP's bottom line: The computer giant takes in close to $30 billion a quarter.
Still, the move was seen as a way for HP to use its marketing muscle to boost sales for the small company, which builds server-level computers that can host the huge amounts of data and heavy-duty online services that power big Internet companies.
Dell, also looking to jump into that market, will have to keep looking.
“We took a measured approach throughout the process and have decided to end these discussions,” said Dave Johnson, Dell's senior vice president for corporate strategy.Shares of 3Par rose 80 cents, or 2.5%, to $32.88. HP shares rose 47 cents to $39.68, and Dell shares were up 24 cents, or 2% to $12.36.
-- David Sarno