Hewlett-Packard lights the touchpaper for US takeovers

Investment bankers' hopes for a vigorous autumn of deal activity were being borne out in the US yesterday, where takeovers were announced in the software, biotech and leisure industries.

Less than a week after winning a $2.4bn (£1.6bn) bid battle for 3Par, a data storage company, the No 1 American computer maker Hewlett-Packard said it would also buy ArcSight, a security software firm based in California, for $1.5bn.

And ArcSight shares immediately traded above the level of HP's all-cash offer, as investors speculated a rival bidder could emerge.

Also yesterday, Genzyme – the biotech giant which is itself being stalked by Sanofi-Aventis, whose takeover overtures it has so far spurned – sold its diagnostic testing division for $925m. Analysts said the disposal makes good on Genzyme's promise to focus on its more valuable business of developing drugs for rare genetic diseases, and could encourage Sanofi to raise its $17.6bn bid for the company.

Takeover activity is being spurred by the availability of cheap debt financing for big corporations, itself a sign of the return to health of the credit markets.

In the leisure sector, Hertz and Avis Budget, two of the world's biggest car rental firms, have been battling for control of a smaller rival, Dollar Thrifty, since April. Late on Sunday, Hertz won agreement from the Dollar Thrifty for a raised bid of $50 per share, valuing the company at almost $1.6bn. This was up from the $1.1bn at which the two sides first agreed a deal.

Shares in Dollar Thrifty rose even beyond the new level of the Hertz bid, though. Fred Lowrance, an analyst at Avondale Partners, said Avis has shown its intention to raise the bid even further if need be. "Avis Budget is able to do it in terms of access to financing. They can go beyond the $50 mark."

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