Dell Offers $1.6 Billion for 3Par, Topping HP’s Bid (Update2)
By Katie Hoffmann and Aaron Ricadela
Aug. 26 (Bloomberg) -- Dell Inc. raised its bid for 3Par Inc. to $1.6 billion, topping Hewlett-Packard Co.’s offer in the battle for the data-storage provider.
Dell will pay $24.30 a share and 3Par has accepted the increased bid, Dell said today in a statement. HP offered $24 a share this week, surpassing Dell’s original bid of $18 a share.
Analysts, including Kaushik Roy of Wedbush Securities in San Francisco, have said they believe HP, with almost $15 billion in cash, will counter any higher offer from Dell. 3Par, based in Fremont, California, fell 48 cents to $26.28 at 9:36 a.m. in New York Stock Exchange composite trading, indicating that investors also expect a higher bid.
Winning the deal for 3Par, which helps companies more efficiently store data, would give Dell or HP a leg up in competing with rivals Cisco Systems Inc. and International Business Machines Corp. The Dell bid values 3Par at eight times revenue and is more than double 3Par’s share price before any bids were announced.
Dell and HP, the world’s largest personal-computer maker, are both offering a higher premium than acquirers in comparable transactions. In 24 acquisitions of U.S. computer hardware, storage, printing and services companies during the past five years, buyers paid a median of 1.26 times sales, according to data compiled by Bloomberg.
HP vs. Dell
3Par’s stock jumped 45 percent in New York Stock Exchange composite trading on Aug. 23, after HP’s bid was announced. 3Par closed at $9.65 on Aug. 13, the last trading day before Dell’s agreement was made public.
Dell, based in Round Rock, Texas, rose 9 cents to $11.88 in Nasdaq Stock Market trading. HP climbed 28 cents to $38.52 on the New York Stock Exchange.
While HP has about twice the sales of Dell and is more than three times as profitable, it’s coping with the loss of its chief executive officer. Mark Hurd exited on Aug. 6, following a probe that found he filed inaccurate expense reports to conceal a personal relationship with a marketing contractor.
Dell, meanwhile, is trying to rebound from shrinking market share in PCs and tightening profit margins. This month, more than 25 percent of shareholders withheld support for Chief Executive Officer Michael Dell as a director.
To contact the reporters on this story: Katie Hoffmann in New York at khoffmann4@bloomberg.net; Aaron Ricadela in San Francisco at aricadela@bloomberg.net
Last Updated: August 26, 2010 09:39 EDT |
