Computer-maker giant Hewlett-Packard on August 27 struck fast in its battle with Dell to purchase data storage firm 3PAR, raising its offer again just two hours after Dell's latest bid. HP announced it increased its offer to two billion dollars or 30 dollars per share in cash, up 11 percent from Dell's 27 dollars per share offer.
The California-based 3PAR saw its shares skyrocket nearly 25 percent to 32.42 dollars. Dell's stocks rose 2.64 percent while HP shares sunk 1.28 percent. HP, the world's largest computer maker, said it did not require financing to carry out the deal that has been approved by its board of directors. "Once approved by 3PAR's board, HP expects the transaction to close by the end of the calendar year," it said in a statement.
It remained to be seen if Dell would top HP's bid in what increasingly appears to be a war of prestige between the two giants as they struggle to gain an edge with advanced and more complex computer systems as the personal desktop and laptop market nears its peak, analysts said. Dell seems to need the acquisition more than its bigger rival, but for both companies it will give a significant competitive advantage, independent technology analyst Robert Enderle told AFP.
"3PAR would rather go to Dell than Hewlett-Packard and (Dell CEO) Michael Dell is personally invested in the acquisition," he said. "You would think that Dell would prevail but HP could make the acquisition incredibly expensive. But in a bidding war like this, there is a chance that the property will be bid up well beyond what it is worth."
"Both firms realise that they almost don't want the other company to get it more than they want to get it themselves and that is really what is driving this frenzy." The latest bids cap an intensifying two-week battle between the two computer titans for the big data firm that focuses on so-called "cloud computing" in which data is stored remotely.
Dell first announced on August 16 it had reached an agreement to acquire 3PAR at 18 dollars per share. HP made a counter bid of 24 dollars per share in cash. Dell matched that offer, and HP raised its bid to 27 dollars before Dell equalled the offer. Dell said in a statement that it "continues to believe that the acquisition of 3PAR, with its industry-leading storage technology, is important to its customers and will enhance Dell's position in utility-storage solutions."
The computer maker said it expects the deal to close by the end of the year. Both Dell and HP are hoping the acquisition would offer near-exclusive control over the market of advanced high-end data storage solutions, where 3PAR is the most dominant player.
3PAR's technology enables large companies and government bodies to shift to "cloud" storage platforms, giving them extra speed in accessing data and cutting storage costs by nearly 59 percent, according to the company. 3PAR "is for a good deal of the future where server income is going to come from, and both companies extract a large portion of their revenues in the server market," analyst Enderle said.