Dell Matches HP's $1.6 Billion Bid For 3PAR - 3PAR Accepts
Dell announced this morning that 3PAR has accepted its increased offer to acquire the storage company for $24.30 per share in cash, or approximately $1.6 billion, net of 3PAR's cash. — Dell had previously signed an agreement …
Context & Ripple Effects
This is round two of a live bidding war: HP moved first with a competing offer of roughly $1.6 billion for 3PAR, and Dell has responded by raising its own bid to $24.30 per share in cash — approximately $1.6 billion net of 3PAR's cash — which 3PAR's board has now accepted as of August 26, 2010. The ball is back with HP, which must either top the price again or walk away from a target both giants want.
For Dell, the logic repeats a familiar playbook: its 2007 purchase of EqualLogic for $1.4 billion was the company's entry ticket into shared storage, and 3PAR's utility-style arrays would deepen exactly that portfolio. Two large storage acquisitions in three years signals that Dell sees storage as the margin engine its server business lacks.
First-order effects
- 3PAR's board has accepted Dell's increased $24.30-per-share cash offer (~$1.6 billion net of cash), locking in a materially higher exit than the original agreement — provided Dell closes before HP bids again.
- HP must immediately decide whether to counter-bid a third time or concede a strategically important storage asset to its closest server rival.
Second-order effects
- A contested auction between two of the largest x86 server vendors sets a fresh valuation benchmark for mid-market storage targets, raising the asking price every other acquisition candidate in the sector will demand.
- Whoever loses 3PAR faces pressure to buy an alternative array vendor quickly rather than build, accelerating consolidation among remaining independent storage names.
Third-order effects
- If the pattern holds, server hardware economics push Dell and HP to assemble integrated storage-plus-compute stacks through acquisition, shrinking the population of standalone storage companies and concentrating the data-center stack in fewer hands.
The trend: Server vendors are consolidating storage assets through escalating M&A to build integrated data-center stacks, turning storage startups into contested prizes between a handful of hardware giants.