NEW YORK (
said late Tuesday it's opening up merger talks with
Securities and Exchange Commission
filing after the closing bell, 3Par disclosed that its board had met Monday and determined HP's unsolicited acquisition proposal was "reasonably likely" to lead to a deal that would be "superior" to the one 3Par struck with
As a result, the Fremont, Calif.-based utility storage technology company said it plans to open the talks with HP to "fully evaluate" the proposal, which values 3Par shares at $24 each, well above Dell's $18 a share deal. 3PAR also plans to provide HP with non-public information about its operations and businesses as part of the process.
3Par, whose shares continued to rise on Tuesday, said in the filing that it has informed Dell of its decision and that, at this time, it continues to recommend Dell's proposal to shareholders. If 3Par does ultimately determine that HP's bid, which surprised the markets on Monday, is "superior," then Dell will have three business days to further negotiate and amend its own offer, 3Par said.
HP's offer, which values 3Par at $1.6 billion in cash, is nearly 40% higher than the $1.15 billion agreement the company reached with Dell on August 16.
3Par's stock finished Tuesday at $27.04, up 3.6%, on volume of 7.2 million, well beyond the issue's trailing three-month daily average of around 2 million.
The battle between HP and Dell for 3Par has helped out shares of other data storage companies since the Dell deal was first announced, including
( CML), and
( ISLN), which have gained 20%, 19% and 24% respectively over the past six sessions.
Research firm ThinkEquity weighed in on the tussle Tuesday, saying it expects HP will be able to outlast Dell in a protracted bidding war, "not just because of HPQ's relative size advantage, but also because HPQ's presence in the high-end Storage market via its HDS
Hitachi Data Systems relationship could allow it to achieve faster payback than Dell on its investment."
The firm believes Dell will raise its bid -- if only to increase the cost for HP -- and it doesn't expect
to enter the bidding, as some have speculated.
ThinkEquity has hold rating on 3Par shares with a price target of $27, which is its determination of where the bidding between HP and Dell may end, and the firm recommends current 3Par shareholders hang in there until the war subsides.
Written by Michael Baron in New York
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.