Feeds

HP sharp-elbows Dell to bid for 3PAR

See you and raise you

Internet Security Threat Report 2014

HP has written to 3PAR CEO David Scott offering to buy the company for $24/share, trumping Dell's $18/share bid.

So much for HP's preference for HDS' USP-V technology, which it OEMs as its high-end XP array.

HP's bid is worth $1.6bn, a third more more than Dell's bid. It has been approved by HP's board and there is no need to borrow cash to fund it.

The hand of David Donatelli, HP's EVP and general manager for Enterprise Servers, Storage and Networking, is visible here. We assume he took the idea to Cathy Lesjak, HP's interim CEO and she went to the board with it.

Donatelli said in a prepared statement: “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. We’ve seen great momentum with our Converged Infrastructure strategy, and 3PAR accelerates that strategy, particularly in cloud and scale-out markets.”

The full text of HP's letter to 3PAR follows:

August 23, 2010

Mr. David Scott President and Chief Executive Officer 3PAR, Inc. 4209 Technology Drive Fremont, CA 94538

Dear David:

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.

Sincerely,

Shane Robison Executive Vice President and Chief Strategy and Technology Officer HP

3PAR's board is duty-bound to consider this proposal and, financially speaking, it is superior to Dell's - plus, from a marketing viewpoint, HP would give 3PAR greater exposure to enterprise-level storage customers, having a larger number of them than Dell, and a greater services capacity to design and implement converged compute, networking and storage systems for them.

It is perhaps odd that HP wasn't involved already. There is no mention in the HP letter of any preceding conversations and, we might assume, the Hurd departure shenanigans has prevented HP until now participating in what has become a bidding war for 3PAR.

The onus is on Dell to respond and it will be fighting a much larger competitor with deeper pockets. If HP is determined to have 3PAR and deny it to Dell then the ultimate victory will go to HP. What would Dell do then? Perhaps it might consider OEM'ing HDS' USP-V, because HP will have no need of it. ®

Choosing a cloud hosting partner with confidence

More from The Register

next story
NSA SOURCE CODE LEAK: Information slurp tools to appear online
Now you can run your own intelligence agency
Azure TITSUP caused by INFINITE LOOP
Fat fingered geo-block kept Aussies in the dark
Yahoo! blames! MONSTER! email! OUTAGE! on! CUT! CABLE! bungle!
Weekend woe for BT as telco struggles to restore service
Cloud unicorns are extinct so DiData cloud mess was YOUR fault
Applications need to be built to handle TITSUP incidents
Stop the IoT revolution! We need to figure out packet sizes first
Researchers test 802.15.4 and find we know nuh-think! about large scale sensor network ops
Turnbull should spare us all airline-magazine-grade cloud hype
Box-hugger is not a dirty word, Minister. Box-huggers make the cloud WORK
SanDisk vows: We'll have a 16TB SSD WHOPPER by 2016
Flash WORM has a serious use for archived photos and videos
Astro-boffins start opening universe simulation data
Got a supercomputer? Want to simulate a universe? Here you go
Do you spend ages wasting time because of a bulging rack?
No more cloud-latency tea breaks for you, users! Get a load of THIS
prev story

Whitepapers

Free virtual appliance for wire data analytics
The ExtraHop Discovery Edition is a free virtual appliance will help you to discover the performance of your applications across the network, web, VDI, database, and storage tiers.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
The total economic impact of Druva inSync
Examining the ROI enterprises may realize by implementing inSync, as they look to improve backup and recovery of endpoint data in a cost-effective manner.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Website security in corporate America
Find out how you rank among other IT managers testing your website's vulnerabilities.