LinuxGram

Dell pulled out of the race to acquire 3PAR Thursday morning after HP upped its $30-a-share bid of last Friday to $33 a share, pushing 3PAR’s valuation past $2 billion to roughly $2.1 billion.

3PAR sent out a statement Thursday morning saying that Dell went to $32 before the three-day clock ran out on it Wednesday at midnight, and HP countered Thursday morning with $33.

The 3PAR board recognized HP’s revised $33 bid as the “superior proposal” and said it told Dell it would go with HP unless Dell put more money on the table under the perpetual matching rights clause in their original deal.

Dell followed an hour later with a statement of its own saying it’s through. It’ll settle for the $72 million termination fee.

Dave Johnson, the ex-IBMer who’s now Dell’s senior vice-president of corporate strategy, said in the concession statement, “We took a measured approach throughout the process and have decided to end these discussions.”

It was obviously from the revised proposal that 3PAR said Dell put on the table when it went from $27 a share to $32 a share that 32 bucks was Dell’s last gasp.

3PAR said Dell wanted a termination fee of $92 million, $20 million more than the termination fee negotiated last week, as well as a multi-year reseller agreement that HP would have been saddled with that 3PAR said “contained fixed pricing and other terms that the 3PAR board of directors determined to be unacceptable.”

Dell later confirmed that 3PAR rejected its last offer and Bloomberg has talked to two people who told it that HP could probably gotten the joint for 30 bucks a share if it hadn’t acted precipitously.

It said it heard HP raised its bid to $33 “at 8 am New York time, 90 minutes before 3Par was due to publicly disclose its decision, believing that 3Par would have otherwise taken Dell’s offer.” It cost it another $188 million.

Anyway, to recap, Friday Dell matched HP’s bid of $27 and 3PAR accepted Dell offer. HP immediately went to $30 and last Friday night 3PAR’s board acknowledged HP’s money was a “superior offer” to Dell’s and told Dell it would terminate their merger agreement in three business days to go with HP unless Dell sweetened the deal. thirty-two dollars was its answer.

Wall Street thought Dell would up HP’s $33 bid because 3PAR stock started trading at $33.60 a share on the news of HP’s revised offer.

Two weeks ago Dell thought it had 3PAR in its pocket at $18 a share, roughly $1.15 billion, a few bucks more a share than it actually wanted to pay. HP upset the apple cart a week later with an unsolicited bid of $24 a share, starting last week’s run-up.

The money HP’s laying out is way more than ousted HP CEO Mark Hurd was reportedly willing to plunk down for the joint.

Hurd loyalists say he figured 3PAR wasn’t worth more than $750 million, roughly two-and-a-half times revenue – it hasn’t made any money in the three years it’s been public – and HP, in Hurd’s twilight hours at the firm, did refuse to improve on Dell’s original $1.15 billion offer.

Those same loyalists shake their collective head in disbelief that David Donatelli, the HP server and storage chief who egged HP on to victory in the unHurd-like auction, can make the $2.1 billion back anytime soon for all the fluttering of clouds. The normal business case HP works on is five years.

Supposedly this is another indication that without Hurd HP is on a slippery slope and about to careen downhill. Many in Hurd’s bunch of executives are reportedly updating their resumes and interviewing, aiming to collect their bonuses at the end of the year and bolt before their options get soggy from being underwater. If true, the HP board doesn’t see it coming. It’s hasn’t offered retention bonuses.

Oh, by the way, HP’s internal pool is betting that Hurd’s replacement will be an outsider on the theory that picking an internal candidate over the others who want the job will create an unpleasant situation. Donatelli wants the job, so does his boss Ann Livermore, who’s lost out twice before, printer chief Vyomesh Joshi and PC chief Todd Bradley.