HP, Dell in Bidding War for 3Par
Mark Hurd’s unexpected departure from Hewlett-Packard earlier this month may have shaken the company a bit, but it hasn’t clouded its strategic objectives. HP this morning made a $1.6 billion bid to buy 3Par, just a week after Dell agreed to buy the data-storage provider for $1.15 billion.
Hewlett-Packard’s (HPQ) offer is greater than its rival’s by a third–$24 a share to Dell’s (DELL) $18 a share. And the offer isn’t subject to any financing contingency. If it’s approved by 3Par’s board, HP says a deal could close “immediately following termination of the Dell merger agreement.”
“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,” said Dave Donatelli, HP executive vice president and general manager, Enterprise Servers, Storage and Networking, in a statement. “We’ve seen great momentum with our Converged Infrastructure strategy, and 3PAR accelerates that strategy, particularly in cloud and scale-out markets.”
Interestingly, HP’s offer is its second bid for the company, which it says it has been in talks with for some time.
HP Proposes to Acquire 3PAR for $24 per Share in Cash
PALO ALTO, Calif.–August 23, 2010 HP (NYSE:HPQ) today announced that it has submitted to 3PAR Inc. (NYSE:PAR) a proposal to acquire all of the outstanding shares of 3PAR for $24.00 per share in cash, or an enterprise value of $1.6 billion.
The proposed transaction represents a 33.3% premium above the price proposed by Dell Inc. HP’s proposal is not subject to any financing contingency and has been approved by HP’s board of directors. Once approved by 3PAR’s board, HP expects the transaction to close by the end of the calendar year.
The addition of 3PAR’s next-generation storage architecture will accelerate HP’s winning Converged Infrastructure strategy, which provides customers with an unmatched portfolio of intellectual property across storage, server and networking solutions. 3PAR’s highly scalable storage systems will further strengthen HP’s ability to deliver the highest levels of performance, efficiency and reliability to customers worldwide. The combination will bolster HP’s storage offerings and diversify its portfolio across key growth markets.
“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,” said Dave Donatelli, executive vice president and general manager, Enterprise Servers, Storage and Networking, HP. “We’ve seen great momentum with our Converged Infrastructure strategy, and 3PAR accelerates that strategy, particularly in cloud and scale-out markets.”
Investor and analyst conference call
HP will host a conference call for financial analysts and stockholders today at 6 a.m. PT to discuss its proposal to acquire 3PAR.
The call, hosted by Dave Donatelli, will be accessible at www.hp.com/investor/home.
The following is the full text of the letter HP sent to the 3PAR board regarding its offer:
August 23, 2010
Mr. David Scott President and Chief Executive Officer 3PAR, Inc. 4209 Technology Drive Fremont, CA 94538
We are pleased to submit to you and your Board of Directors a proposal to acquire 3PAR, Inc., (”3PAR”) which is substantially superior to the Dell Inc. (”Dell”) transaction. We are very enthusiastic about the prospect of entering into a strategic transaction with 3PAR and believe that a business combination with HP will deliver significant benefits to your stockholders, customers, employees and partners.
We propose to increase our offer to acquire all of 3PAR outstanding common stock to $24.00 per share in cash. This offer represents a 33.3% premium to Dell’s offer price and is a “Superior Proposal” as defined in your merger agreement with Dell. HP’s proposal is not subject to any financing contingency. HP’s Board of Directors has approved this proposal, which is not subject to any additional internal approvals. If approved by your Board of Directors, we expect the transaction would close by the end of the calendar year.
In addition to the compelling value offered by our proposal, there are unparalleled strategic benefits to be gained by combining these two organizations. 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. Together, we will accelerate our ability to offer unmatched levels of performance, efficiency and scalability to customers deploying cloud or scale-out environments, helping drive new growth for both companies.
As a Silicon Valley-based company, we share 3PAR’s passion for innovation. We have great respect for 3PAR’s management team and its employee base, and are excited about the prospect of working together going forward. Our long track record of acquiring companies and integrating them seamlessly into our organization gives us great confidence that this will be a successful combination.
We are including with this letter a draft merger agreement with the same terms as your announced transaction with Dell but which eliminates the termination fee.
We understand that you will first need to communicate this proposal and your Board’s determinations to Dell, but we are prepared to execute the merger agreement immediately following your termination of the Dell merger agreement. We also are prepared to commence a cash tender offer reflecting our higher price. Our tender offer would, of course, be conditioned upon your Board of Directors’ approval of a transaction with HP.
We look forward to making this opportunity a reality and consummating a mutually beneficial transaction.
Executive Vice President and Chief Strategy and Technology Officer HP