HP Raises 3PAR Bid to $2.4 Billion

3PAR announced today that it received yet another revised proposal from HP to acquire all of 3PAR’s outstanding common stock at $33 per share for a total of $2.4 billion. As the tug of war between HP and Dell continues, a couple of organizations have filed suit against 3PAR.

Dell is also demanding more cash and conditions – including a multi-year reseller deal – be added to its termination agreement with 3PAR.

There has apparently been a quiet back and forth over the past few days. According to a statement from 3PAR, although the company previously notified Dell of its intention to terminate its merger agreement, the agreement was not terminated and remains in effect. Following 3PAR’s notice of intent to terminate the merger agreement, and prior to receiving HP’s revised proposal, Dell increased its offer price from $27 per share to $32 per share.

In a press release issued today, 3PAR stated that Dell’s revised acquisition proposal also included an increased termination fee of $92 million payable by 3PAR to Dell as a condition to accepting a superior proposal, and a multi-year reseller agreement with Dell, which would by its terms be assumed by an acquirer of, or successor in interest to, 3PAR in the event of a change in control of 3PAR (including the acquisition of 3PAR by HP or another third party), and which contained fixed pricing and other terms that the 3PAR board of directors determined to be unacceptable.

3PAR also stated that the terms of 3PAR’s merger agreement with Dell require the 3PAR board of directors to continue to recommend that 3PAR stockholders accept Dell’s cash tender offer, and tender their 3PAR shares pursuant to Dell’s tender offer, so long as the merger agreement with Dell remains in effect. Accordingly, at this time, since the merger agreement between 3PAR and Dell remains in effect, 3PAR’s board of directors continues to unanimously recommend that 3PAR stockholders accept the cash tender offer made by Dell and tender their shares of 3PAR common stock pursuant to such offer.

The 3PAR ping pong match between Dell (NASDAQ: DELL) and HP (NYSE: HPQ) began at $1.15 billion and quieted down for a few days after reaching a fever pitch last Friday when HP countered Dell’s $27-per- share offering with a $30-per- share bid, bringing the value of the deal to about $2 billion. Later in the day, 3PAR (NYSE: PAR) announced that the HP bid was a “superior offer” to Dell’s, and 3PAR’s board of directors notified Dell of its intention to terminate the merger agreement and giving Dell three days to up its offer.

There are some organizations out to hamper the acquisition or at least grab a share of the billions of dollars being thrown 3PAR’s way as a pair of lawsuits have been filed against the company in the past 24 hours.

Crossroads Systems filed suit against 3PAR and several other companies yesterday in U.S. District Court for the Western District of Texas, Austin Division. The suit alleges that 3PAR, American Megatrends, Chelsio Communications, DataCore Software, D-Link, iStor Networks and Rorke Data, infringed on a patent related to Crossroads’ router technology.

Additionally, the International Business Times reported this morning that the Steamfitters Union Local 449 Pension Fund has filed a lawsuit in California Superior Court of Alameda County, in which the group alleges that 3PAR’s leadership rigged the bidding process to make money at the expense of shareholders.

3PAR would not comment on the pending lawsuits.

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Kevin Komiega
Kevin Komiega is an Enterprise Storage Forum contributor.

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