Dell concedes defeat in 3PAR bidding war

Dell has lost the battle for 3PAR

Dell has given up its pursuit of storage specialist 3PAR, confirming that it will not up its bid of $32 (£20.78) per share, and will seek to collect a $72m (£46.75m) break-up fee for ending the acquisition talks.

Dell's move came just hours after rival buyer HP increased its bid to $33 (£21.42) per share, valuing 3PAR at $2.4bn (£1.55bn).

"We took a measured approach throughout the process and have decided to end these discussions," said Dave Johnson, Dell's senior vice president for corporate strategy.

HP and Dell have spent weeks in a public bidding war for 3PAR, which produces systems viewed as particularly valuable in areas such as datacentre virtualisation.

Dell originally offered $1.15bn (£746m) for 3PAR, but HP soon stepped in with an offer that trumped Dell's figure by a whopping $1bn (£649m).

Benjamin Woo, vice president of storage at analyst firm IDC, suggested that the deal marked a personal victory for Dave Donatelli, executive vice president and general manager for enterprise servers, storage and networking at HP.

"This is his first major acquisition since taking on this role after spending 22 years at EMC," said the analyst.

"This expensive acquisition should give notice to HP investors that HP has not forgotten about storage, and that it recognises the need to update and improve its position in the storage marketplace."

Dell, meanwhile, could now run the risk of alienating its storage partners, having attempted to acquire an in-house alternative.

"The aggressive bidding war could strain the already tepid relationship between Dell and EMC," said Woo. "This loss for Dell could give EMC an advantage in negotiating with Dell for further business."