HP Wins 3PAR For $2.4 bn, Dell Drops Out

Hewlett-Packard won the bidding war to buy data storage company 3PAR Inc for $2.4 billion, as rival Dell bowed out on Thursday. HP raised its cash offer by $3 to $33 per share, beating Dell’s $32-a-share offer and ending an escalation of bids. 3PAR shares closed up 2.5 percent at $32.88 on the New York Stock Exchange.

They had mostly traded around $10 this year, until Dell announced its initial $18 per share bid in mid-August. The deal values 3PAR at over eight time’s sales, and many analysts said that was too high for a company that has barely ever made a profit since it was founded in 1999.

The company ended its third quarter with $14.7 billion in cash and cash equivalents. But Dell was also more persistent than many had expected. Dell and HP each made four public bids for 3PAR. Dell said it is entitled to a $72 million payment from 3PAR for breaking their merger agreement. Dell shares ended Thursday up 2 percent at $12.36, while HP shares closed up 1.2 percent at $39.68. “We took a measured approach throughout the process and have decided to end these discussions,” Dave Johnson, corporate strategy, Dell.

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