Why are Dell, HP bidding for 3PAR?
TEXT OF STORY
BOB MOON: Dell says it’s upped the ante for the data storage company 3PAR and outbid Hewlett Packard by 30 cents a share. 3PAR’s board is said to have accepted Dell’s offer. The bidding war bumped up the small company’s share price from 9 bucks to more than $25. Which raises the question: Was this all really a billion dollar-plus game of chicken?
Here’s Marketplace’s Gregory Warner reports.
GREGORY WARNER: This is the kind of puzzle that keeps tech analysts up at night. When Dell put in its first bid to buy 3PAR, the data storage firm, Hewlett-Packard declined to counter — at first. Then, HP changed its mind. Big time.
PETER FALVEY: HP trumped the Dell bid substantially, when they came in at $24 a share.
Peter Falvey is managing director of the technology investment banking group at Morgan Keegen. He says that bid, seen as an overbid by some, led to two outcomes for HP.
FALVEY: So either they win and they pay a relatively high price or they “lose,” and they make Dell pay a lot of money for it.
And pay they did. Dell’s new $1.5 billion offer was accepted this morning by 3PAR. Falvey says there is one other theory for why HP suddenly jumped so hard into the fray. It got reporters to stop talking about the sex scandal around former chief executive Mark Hurd. Now we’re all talking about this bidding war.
In Philadelphia, I’m Gregory Warner for Marketplace.
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