Dell To Challenge HP With New 3PAR Bid

Dell is planning a stronger bid for data storage firm 3PAR, challenging Hewlett-Packard Co’s offer of $24 per share. The source said Dell’s new bid was likely to be more ‘competitive’ than HP’s last offer of $1.6 billion, but did not say how much higher the new bid would be.

The pursuit of 3PAR comes as HP and Dell, as well as other technology vendors such as IBM and Cisco Systems, vies to sell a wider array of products and services and invest in new technology.

3PAR specialises in high-end data storage, a key part of ‘cloud computing’ an increasingly popular technology that enables computer users to access data and software over the Internet, allowing companies to save costs. Some analysts, however, have said HP’s latest bid is too high and Dell might walk away.

3PAR shares were down around 0.2 percent at $26.99, although they briefly raised to $27.49 after Reuters reported Dell’s plans for a new bid. 3PAR said it will start merger talks with HP after HP’s offer topped Dell’s previous $1.15 billion bid. If 3PAR’s board endorses HP’s bid, it would give Dell three business days to sweeten its offer.

3PAR said in a filing, it had not yet made such a decision. Bidding wars are rare in the tightly knit technology sector, where deals are often made behind closed doors. In the last notable bidding war in the tech industry, EMC outbid NetApp last year to buy Data Domain for $2.4 billion. Data Domain was advised in that deal by Frank Quattrone, the same veteran technology banker who is advising 3PAR in the latest negotiations.

Credit Suisse Group AG is advising Dell and JPMorgan Chase & Co advises HP. Dell shares rose 1.8 percent to $11.79, while those of HP were up one penny at $38.40 in late afternoon trading.