Hewlett-Packard Co could spark a bidding war for data storage company 3PAR Inc after offering to pay $1.6 billion, topping rival Dell Inc’s bid by a third.
It appeared that investors were anticipating a higher bid when shares in 3PAR climbed 45 percent to above HP’s $24-a-share offer.
Analysts said 3PAR is a particularly attractive target for companies like HP and Dell because of its expertise in a niche area of high-end storage.
“We expect to see at least one to two more iterations before this process is over”, said Collins Stewart analyst Louis Miscioscia, “not based on value, but on the deal being ‘strategic’ in solidifying either’s position in the storage space”.
Following Intel Corp’s $7.7 billion bid for security software maker McAfee Inc last week, August has been an unusually active month for deals.
“What we’re seeing is a shift toward convergence,” said Morgan Keegan analyst Brian Freed, “You have these one-stop shops forming that span everything from servers to networking and storage.
“You’re going to see this natural consolidation of hundreds and thousands of players into a smaller number of dominant players”.
Analysts had speculated the company would be sidelined from mergers and acquisitions after Chief Executive Officer Mark Hurd resigned this month, so the bid came as a surprise.
HP shares fell 2 percent to $39.04. Shares of 3PAR, which made a loss on revenue of $194 million in its last fiscal year, jumped 45 percent to $26.09.
HP said it was awaiting a response from 3PAR. Dell was not immediately available, while 3PAR declined to comment.
