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3Par Accepts Dell's Raised Bid of $27/Share

Updated to include background information and share price changes.
NEW YORK ( TheStreet) -- Dell (DELL) said Friday that 3Par (PAR - Get Report) has accepted its increased offer to acquire the data storage company for $27 a share in cash, or about $1.8 billion.

Dell said it continues to believe that the acquisition of 3Par is important to its customers and will enhance Dell's position in utility-storage solutions.

Dell's offer of $27 a share matches Hewlett-Packard's (HP) latest offer Thursday for 3Par.

HP (HPQ - Get Report) hiked its bid for 3Par to $1.8 billion late Thursday, hours after Dell raised its bid for 3Par to $1.6 billion. Dell's original offer for 3Par was $18 a share, or $1.15 billion.

Dell said Friday a new Dell-3Par accord was reached under the provision in the existing agreement between the companies that allows Dell to match competing bids.

Separately, 3Par said it and Dell signed a second amendment to their previously announced merger agreement reflecting the new offer price, and maintaining the termination fee unchanged at $72 million, which is payable in the event that 3Par receives and accepts another unsolicited acquisition proposal that its board determines to be superior to Dell's increased offer.

A source tells the Wall Street Journal that Dell "plans to drag this out" for HP. However, according to the source, Dell is unlikely to up its bids significantly with every HP counteroffer. Rather, it would match or slightly exceed what HP offers, the source said.

Shares of 3Par have surged by 9.5% to $28.50 in premarket trading, while shares of Dell were unchanged at $11.75. HP is trading sideways at $38.21.

-- Written by Andrea Tse in New York.

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