Dell Drops Out of 3Par Auction

NEW YORK (TheStreet) -- Dell's(DELL) done.

The Round Rock, Texas PC shop says it has given up pursuit of 3Par(PAR) in the wake of Hewlett-Packard's(HPQ) bigger $33-a-share all-cash offer Thursday.

"We took a measured approach throughout the process and have decided to end these discussions," Dell chief strategist Dave Johnson said in a press release.

Dell threw in the towel just two hours after HP raised its bid for 3Par by another 10% for a deal with a total value of $2.06 billion.

HP will likely gain approval from 3Par's board and proceed with a merger.

The rich bidding war between the PC duo indicates the eagerness for HP and Dell to gain access to the increasingly popular cloud-based technology that is reshaping the network data storage market.

For its part, Dell walks away from the three-week fevered bidding war with a $72 million termination fee and the task of trying to explain what is next in its storage strategy.

"We believe our strategy of creating open, affordable and capable solutions resonates well with customers and will enable us to continue to outgrow the industry," said Johnson in the release.

Dell shares rose 1% to $12.27 on news that it had dropped out of the 3Par race. Shares of 3Par, which had traded above HP's $33 bid price on hopes of a Dell counter offer, have now fallen below that level to $32.84 in midday trading. HP shares were up less than 1% to $39.39.

--Written by Scott Moritz in New York.

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