Does Dell and HP's "ridiculous" bidding war expose storage shortcomings?
Dell has pulled out of a high-profile bidding war for a storage firm after HP lodged a substantial offer - but analysts believe the whole saga merely demonstrates storage shortcomings at the IT firms.
Dell has pulled out of its bidding war for 3Par after Hewlett-Packard upped its price to more than $33 per share, leaving the data storage firm with a $72 million bill in break fees.
According to the Bloomberg news wire, the winning bid values 3Par at $2.07 billion, some 325 times its earnings before tax, interest, depreciation and amortisation compared with an industry average ratio of 16.
The $33 offer is also three times the value at which the vendor’s shares were trading before Dell made its initial $18 bid on 16 August. But the move is likely to raise questions over whether HP is paying too high a premium for a stock that has languished at $10 for the last 18 months. Yesterday 3Par’s shares closed at $32.88, just below HP’s offer price.
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