3PAR (NYSE:PAR): We’ve Got an Old-Fashioned Bidding War!

3PAR <span class= PAR bidding war" src="http://oh-image.s3.amazonaws.com/August/100830PAR.jpg" border="0" alt="3PAR PAR bidding war" width="240" height="160" /> I ended my blog on the 3PAR PAR situation earlier this week with the following paragraph:

What will happen next? Michael Dell may reach deeper into his corporate pockets and up the bid once more. Or if Dell walks away, the shares will likely fall quickly back to the 24 dollars that Hewlett is bidding. In either case the trading in the stock and options will remain a special situation for the near term.

This is an old-school bidding war! After Hewlett-Packard HPQ bid $24 per share, Dell Inc. DELL responded by bidding 30 cents higher with a $24.30-per-share bid, which was quickly accepted by the PAR board of directors.

Hewlett wasn’t going away, however, and they bid $27 per share. Dell matched that increased bid and again the 3PAR board accepted Dell’s bid. Hewlett quickly bid $30 dollars a share Friday and the stock is now trading above 32 dollars per share! Let’s look at an updated stock chart. Friday’s price was more than three times what the shares were going for two weeks ago!

Daily chart of 3PAR Inc. (PAR)

It seems that Hewlett-Packard is being the more aggressive player here. Dell, on the other hand, enjoys from the original first merger agreement with 3PAR the option to match any competing bid for the company. In other words, for Hewlett to win here, they have to be willing to go higher than Dell is willing to match.

Again, this may be far from over. The stock price indicates traders are speculating an even higher bid coming. Note that these competing companies have more than $12 billion in cash sitting in their corporate coffers and the size of this deal is still a relatively small $2 billion.

This is fun to watch!

Photo Credit: Editor B

Share and Enjoy: