Deals

HP outbids Dell again with $2B offer for data storage company 3Par (updated)

Update: HP just upgraded its offer even further this morning. It’s now offering $2 billion for 3Par, or $30 a share. Earlier story below.

The back and forth between Dell and HP regarding the acquisition of data storage company 3Par continues. Only a few hours after 3Par accepted Dell’s increased $1.6 billion offer, HP upped the ante again by offering $1.8 billion for the company, or $27 per share in cash.

Dell’s new offer was a mere 30 cents above HP’s previous $24 per share offer, and given HP’s much deeper pockets (it reported $115 billion in 2009 revenue, compared to Dell’s $53 billion), it’s no surprise that HP retaliated. Dell’s minor increase over HP’s previous offer signaled to some analysts that it may give up the battle if HP comes back with a much higher offer, according to the New York Times.

The battle for 3Par’s hand began last week when Dell offered to buy the company for $1.15 billion. HP reportedly made an earlier offer for the company as well, but was rejected.

In a letter to 3Par CEO David Scott, HP CTO Shane Robison argued that there are strategic advantages for 3Par to join his company: “HP is uniquely positioned to capitalize on 3Par’s next-generation storage technology by utilizing our global reach and superior routes to market to deliver 3Par’s products to customers around the world.”

HP says that the addition of 3Par’s advanced server technology “would accelerate its Converged Infrastructure strategy, which provides customers with a portfolio of intellectual property across storage, server and networking solutions.”

Given the increasing importance of cloud computing — in which users would rely on the internet instead of their local computer for applications and storage — having a company like 3Par in your corner would allow you to offer services in the cloud at a lower cost. That’s certainly what Dell and HP are looking for, and I suspect we’ll see further plays in this field in the coming months.

3Par has raised over $183 million since its founding in 1999, with backing by Integral Capital Partners, Alliance Bernstein, Open Field Capital, Mayfield Fund, Worldview Technology Partners, Menlo Ventures, and Van Wagoner Capital Management. It went public in 2007, even though it was losing money at the time.