HP seeks to outbid Dell offer for 3PAR

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The Independent Tech

In a looming clash between the world's personal computer-making titans, Hewlatt-Packard sought Monday to outbid rival Dell in buying data storing firm 3PAR.

HP announced a 1.6 billion dollar offer to purchase 3PAR stocks for 24 dollars per share in cash, representing a 33.3 percent premium above Dell's offer last week for 1.15 billion dollars.

"Once approved by 3PAR's board, HP expects the transaction to close by the end of the calendar year," the world's largest computer producer said in a statement as it made the offer.

"We are prepared to execute the merger agreement immediately following your termination of the Dell merger agreement," HP wrote in a letter to 3PAR CEO David Scott.

The acquisition bid highlights the computer manufacturers' effort to target advanced and more complex computer systems as the personal desktop and laptop market near their peak, analysts said.

HP said the acquisition will accelerate its so called "converged infrastructure strategy, which provides customers with an unmatched portfolio of intellectual property across storage, server and networking solutions."

HP's offer "underscores the intensity of the competition between the largest technology companies as they seek to assemble portfolios of integrated offerings for the data center," Data Center Knowledge analysis firm said.

The offer came as HP undergoes a leadership transition following the departure of chief executive Mark Hurd in early August in the wake of a sexual harassment charge that uncovered subterfuge with company expenses.

Hurd's temporary replacement was named as current chief financial officer Cathy Lesjack.

HP's bid also raised questions about the profitability of the deal.

"Although we believe the acquisition makes sense and it fills a gap in HP's offerings, we believe the management team needs to justify the need for paying such a high multiple for the company especially when there are some other vendors like Compellent Technologies that can be purchased at a lower price," market analysis firm ISI Group said in a note.

3PAR stocks shot up by more than 40 percent in early trading Monday on the back of the acquisition activity.

HP's shares were 2.56 percent lower while Dell edged slightly higher by 0.61 percent.