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Dell raises its bid for 3PAR

Dell raised its offer for 3PAR today with a revised bid that is a mere $20 million more than Hewlett-Packard’s Monday offer of $1.6 billion.

Dell’s latest offer of $24.30 per share beats HP’s $24 per share. Dell’s first offer disclosed Aug. 16 was for $18 per share or $1.15 billion.

Dell also said 3PAR has accepted today’s offer and signed an amendment to their original agreement. The revised agreement increases the termination fee to $72 million that 3PAR must pay Dell if it accepts another offer. The previous termination fee was $53.5 million. HP’s offer to 3PAR did not include a termination fee.

After receiving HP’s offer Monday, 3PAR gave Dell three days to respond. That three-day window ended today. Now we await HP’s response to Dell’s revised bid.

According to financial analyst Aaron Rakers of Stifel Nicolaus Equity Research, Dell’s response was not surprising and he expects HP to raise the ante again.

“… this acquisition makes sense for Dell when thinking about the need to diversify deeper into the enterprise data center market,” Rakers wrote today in a note to clients. “As it relates to HP making a counter offer, our discussions led us to believe it is likely that HP will counter in this situation, given that they had an offer on the table for 3PAR prior to Dell’s original announcement, the 33% premium on [HP’s] original counter offer, availability of cash on hand, and the company’s desire to have a proprietary offering in the high-end storage market.”

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