It looks like the bidding war for 3PAR could be over. Dell has just issued a release indicating that it will not increase its most recent $2 billion proposal to acquire 3PAR, and the company’s has ended acquisition talks for the data storage company. Dell is entitled to receive a $72 million break-up fee from 3PAR upon the termination of its merger agreement.
This morning, HP upped the ante today with an offer worth $33 per share or $2.4 billion. 3PAR has accepted HP’s bid. Dell also said that its improved offer included a proposed commercial relationship and an increased break-up fee.
Dell had previously signed an agreement to acquire 3PAR for $18 per share or $1.13 billion, with a provision for matching competing bids. HP then effectively outbid the company and offered $1.6 billion, but Dell matched that offer yesterday, after which HP made a renewed bid for $1.8 billion. HP then offered $2 billion last Friday, which Dell matched.
HP basically doubled Dell’s original bid for 3PAR, which was high to begin with. 3PAR provides a virtualized utility storage platform that enables customers to significant drive down cloud computing infrastructure, storage and associated management costs.
As TechCrunch contributor Steve Cheney wrote last weekend, 3PAR is so valuable because of its “thin provisioning” technology enables disk space to be allocated only when applications need capacity, greatly reducing IT management costs. It doesn’t make sense for HP (or Dell) to try to recreate this technology, so buying is the best option. HP, in particular, wants to increase its innovations, especially after reports that Mark Hurd wasn’t an R&D friendly CEO. Cheney forecasted that HP would win this war, and it looks like he is right.
It looks like this bidding war has come to an end. I’d expect a formal deal with HP to be announced soon.