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HP bids $2.4bn for 3PAR

Dell's new offer given drubbing

Internet Security Threat Report 2014

HP has raised its bid for 3PAR to $33 a share, around $2.4bn, beating a revised Dell offer made earlier today.

Dell had come back with $32/share bid, beating for HP's bid last Friday (27 August)of $30/share, and increased its bid termination fee to $92m.

The 3PAR board has deemed the revised HP bid a superior proposal, again, and given Dell three days notice, again, that it will terminate its agreed merger with Dell, which currently remains in full force, again.

Dell had finally made a strong bid for 3PAR, rather than exceeding an HP bid by just 30 cents a share or matching it. HP has immediately raised Dell's $32/share bid by a dollar, signalling its strong determination not to be beaten. This bidding war surely isn't over yet.

Additionally, as 3PAR's value increases legal challenges to its sale to HP or Dell also increase.

Several ambulance-chasing-type lawyers are trying to get shareholder class-action lawsuits going alleging breaches of fiduciary duty by 3PAR's management.

Now Crossroads Systems, a supplier of routers, storage bridges, virtual tape appliances and so forth has sued 3PAR plus D-Link, Rorke Data, Chelsio Communications, DataCore Software, iStor Networks and American Megatrends, for infringement of a storage router patent. Crossroads is understood to be an aggressive defender of the intellectual property it owns and has been down the IP infringement route before.

Several models of 3PAR's servers and its Inform O/S are identified. 3PAR has declined to comment on the suit.

It's also reported that a union pension fund, the Steamfitters Union Local 449 Pension Fund, with shares in 3PAR, has filed a suit in a California court, alleging that 3PAR management has structured the bid process to favour Dell, and has enriched itself thus denying a just share in the bid money to shareholders.

The suit says 39 per cent of 3PAR stock is owned by the company's directors and executives, meaning that, with our calculations based on the $30/share HP bid value and number of 3PAR shares, these favoured few have stock worth around $732m, compared to a pre-bid value of $236m. That makes for a net gain of almost half a billion dollars.

These shares have also been tendered to Dell in the 3PAR agreement with Dell, meaning Dell doesn't have to get that many shares on the open market. The suit says that Dell's management had a conflict of interest with Dell since they would keep their jobs with a Dell bid and get bucketloads of cash. The pension fund wants the deal to sell 3PAR to Dell stopped.

3PAR has not commented on the lawsuit. ®

Internet Security Threat Report 2014

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