On August 16, 2010, Dell announced that it had signed an agreement to acquire 3PAR, a leading global provider of highly-virtualized storage solutions with advanced data management features, including dynamic tiering and thin provisioning, for multi-tenant cloud-computing environments. Dell was set to acquire all of 3PAR’s remaining common stock for US$18 per share, making the deal worth approximately US$1.15 billion.
In the majority of cases, this would be the end of things. The shareholders would approve, the papers would be signed and the integration efforts would get underway. However, this deal is definitely not part of the usual crowd.
In comes HP, and its deep packets.
On August 23, HP upped the ante and offered to acquire all of 3PAR’s common stock for US$24 per share, valuing the transaction at approximately $1.6 billion. HP’s initial deal represented a 33% premium over Dell’s offer.
Dave Donatelli, executive vice president and general manager of HP’s Enterprise Servers, Storage and Networking division had this to say about HP’s offer:
“HP’s proposal offers superior value to 3PAR’s shareholders. Our global reach, strong routes to market and commitment to innovation uniquely position HP as the ideal fit for 3PAR. We’ve seen great momentum with our Converged Infrastructure strategy, and 3PAR accelerates that strategy, particularly in cloud and scale-out markets.”
Not one to be pushed around, a couple days later Dell bettered HP’s deal slightly, by offering to acquire all outstanding shares for US$24.30 each. In the release, Dell also outlined why they are the ideal candidate for 3PAR:
“Dell believes that its global brand and broad global customer reach will dramatically accelerate 3PAR’s revenue growth. Dell has a demonstrated commitment and track record in integrating and growing acquired companies and nurturing their entrepreneurial and innovative cultures, as illustrated by the dramatic growth of the EqualLogic iSCSI storage business over the last three years.”
On August 26, ten days after Dell’s original deal, HP announced a revised proposal to acquire 3PAR for US$27 per share, valuing the entire transaction at US$1.8 billion.
HP stressed that although the value of the deal had increased significantly, the company is “maintaining [its] disciplined approach to only pursuing acquisitions that [they] believe will strengthen [their] portfolio and create long-term value for shareholders.”
Despite the dramatic increase in price, Dell decided to match HP’s most recent offer, which was allowed due to a provision in the existing agreement between Dell and 3PAR.
BUT…yesterday HP decided to reach even further into its DEEP pockets and proposed a new deal for 3PAR, offering to acquire all the company’s common shares for $30 each, for a total transaction value of $2 billion. This represents an 11% premium above Dell’s most recent offer, and an incredible 67% increase over the initial offer.
As of now Dell has not responded to HP’s most recent offer, but they have shown thus far that they are not going down without a fight.
Tune in next week, when HP and Dell step back into the ring…