Dell announced today that 3PAR has accepted its increased offer to acquire the storage leader for $27 per share in cash, or approximately $1.8 billion, net of 3PAR’s cash. The new Dell-3PAR accord was reached under the provision in the existing agreement between the companies that allows Dell to match competing bids. Will HP raise their bid again?
It seems that 3PAR doesn’t want a prolonged bidding war and has decided to end this before it got out of hand which I think is probably the best move for them. Some analyst believe there is still a high probability that HP might increase their offer to $30 per share which more than likely would knock Dell out of the running. This has to be seen as a major win for Dell and should probably have HP just a bit worried. With the absorption of 3PAR into their portfolio, Dell should be able to really close the gap between them and HP in the storage arena. I don’t think that even eventually losing out on 3PAR is going to stop HP from wanting to improve their storage prospects, now we have only to wonder who HP might go after next.
The cash tender offer, through a wholly-owned Dell subsidiary, is for all outstanding shares of 3PAR common stock, without interest, and subject to reduction for any federal back-up withholding or other taxes. The offer documents will be amended to reflect the new offer price, but this will not alter the timing of the acquisition. Unless extended, the tender offer and any withdrawal rights to which 3PAR stockholders may be entitled will expire at midnight, EDT, on Sept. 20, 2010. Following acceptance for payment of shares in the tender offer and completion of the transactions contemplated in the merger agreement, 3PAR will become a wholly-owned subsidiary of Dell.
The transaction, which is subject to government approvals and the satisfaction of other customary conditions, is expected to close before the end of the year. Based on current estimates, the transaction is expected to be accretive to Dell non-GAAP earnings in its Fiscal Year 2012.