HP are going to be removed from Dell's Christmas card list after outbidding them again with a $1.8 billion offer for computer storage company 3Par Inc.
HP's latest bid works out 11 percent more than Dell's at $27 per share. 3Par had already accepted a $24.30 a share offer earlier in the day. This bidding war between the two computer giants started on August 16th when Dell offered to pay $1.15 billion for 3Par.
3Par have been losing money every year since going public in 2007 and these bids have boosted the price to around nine times the annual revenue of the company. Many analysts are unsure if either company will benefit from such an acquisition.
Shannon Cross, an analyst at Cross Research in Livingston, New Jersey said : “You just literally can target a wider addressable market, The model has been proven to work.” Some believe that Dell and HP can use their global sales forces to quickly increase revenue at 3Par.
“One company wants to not only get it for themselves, but prevent a fierce competitor getting it,” said HP investor Mike Shinnick. “The real question is: Can you make that money off it going forward? It’s very questionable.”
HP are the bigger company of the two, being three times as profitable however they are currently on the hunt for a new CEO after the very public departure of Mark Hurd.