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Previous HP bid for 3PAR rejected

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In a webcast discussing HP's bid for 3PAR today, HP said it had made a previous offer for the company which had, instead, accepted a Dell offer.

HP's David Donatelli, head of its Enterprise Servers, Storage and Networks division, said that HP had run due diligence on 3PAR before any publicity about a 3PAR acquisition and that there was an HP offer on the table when the Dell bid was agreed.

This means that 3PAR's leadership rejected it, preferring the Dell bid and, indeed, agreeing the Dell bid. By the point that 3PAR agreed to go with Dell any further HP bid must have been sought and not found, HP refusing to modify its then outstanding offer, or not been sought.

In either case 3PAR effectively rejected HP. Now HP has come back with a public offer, more or less telling the 3PAR board to think again. It's letter stated: "We propose to increase our offer to acquire all of 3PAR outstanding common stock to $24.00 per share in cash," indicating that, at first glance, the outstanding offer was for less than Dell's $18/share. But suppose that was not the case.

Our thinking is that Dell promised 3PAR arms-length management as a more or less independent entity inside Dell, similar to the acquired EqualLogic operation. Both Dell and 3PAR were happy with the bid.

Donatelli said in the webcast that 3PAR was an excellent fit with HP, being located nearby in Silicon Valley, and that it could quickly be integrated and grow inside HP. He would not answer a question about how3PAR would be managed inside HP, saying it was too soon to say.

Our reading of this is that 3PAR inside HP would be surrounded by a close HP embrace and not run as a semi-independent entity like EqualLogic.

It looks from here as if HP has made a hostile and unwanted bid for 3PAR and that 3PAR will be quite anxious for a re-bid from Dell to take place, although, in their heart of hearts it must fear that Donatelli's pockets are deeper than Michael Dell's. ®

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