Dell to challenge HP with new 3PAR bid-source

25/08/2010 - 17:44

NEW YORK (Reuters) - Dell Inc is planning to submit a more competitive bid for data storage firm 3PAR Inc, challenging Hewlett-Packard Co's offer of $24 per share, a source familiar with the talks said on Wednesday.

The source said DELL (DELL.NQ)s new bid was likely to be more "competitive" than HP's last offer of $1.6 billion, but declined to comment on how much higher its bid would be.

A Dell spokesman declined to comment on the negotiations.

3PAR said on Tuesday it will start merger talks with HP after HP's offer topped Dell's previous $1.15 billion bid.

If 3PAR's board endorses HP's bid, it would give Dell three business days to sweeten its offer. 3PAR said in a filing on Tuesday that it had not yet made such a decision.

A Reuters survey of nine fund managers and analysts on Tuesday found that most expect another bid or two, and a final price of about $29 per share.

The pursuit of 3PAR comes as technology firms vie to sell a wider array of products and services and invest in new technologies like cloud computing.

Some analysts have said HP's latest bid is too high and that Dell might walk away. (Reporting by Ritsuko Ando, editing by Gerald E. McCormick and Robert MacMillan)