The bidding war for 3Par got even crazier today with HP sweetening its offer to $30 a share. This came after Dell boosted its own proposal to $27 a share just this morning.
No matter who wins the bidding war, three venture firms will get a nice, big payday. Mayfield Fund owns 9.9% of 3Par, Menlo Ventures has 15% and Worldview Technology Partners holds 13.4%. FMR LLC, or Fidelity Investments, has 12.2%, according to regulatory filings.
At $30 a share, Mayfield could reap $186 million (6.2 million shares), while Menlo Ventures (9.4 million shares) could receive $282 million, Worldview Technology (8.4 million) could get $252 million and Fidelity (7.6 million) could receive $228 million.
(For a more detailed look at the venture side of this story, please see the Monday edition of peHUB sister publication Private Equity Week.)
Who else gains? Well, Frank Quattrone. His I-banking firm, Qatalyst Partners, is advising 3Par in the current negotiations. (JP Morgan is working with HP and Credit Suisse is working with Dell). Quattrone, in case you forgot, is the former star banker who was found guilty in 2004 of obstructing justice and witness tampering but had the conviction overturned on appeal in 2006.
The shootout for 3Par began nearly two weeks ago when Dell said on Aug. 16 that it was buying the company for $1.15 billion. HP, which is still searching for a new CEO, then swooped in with a $24 a share, or $1.6 billion, offer.
The two—Dell and HP—have been tussling ever since. The war has caused 3Par’s shares to skyrocket. 3Par’s stock closed at $9.65 on Aug. 13 (the Friday before Dell’s offer) giving the company a roughly $604 million market cap. Now shares have more than tripled and are trading at $32.47, for a $2.03 billion market cap. Wow.
Dell wants 3Par because it hopes to become more competitive in the high end storage market which has been dominated by EMC, IBM, Hitachi Data Systems, according to GigaOm. HP, with its counter move, apparently doesn’t want to be left out.
So who will win? One banker says it will be HP. Either HP will outbid Dell or they’ll make Dell overpay. “It’s a win/win,” the banker says.
However, a PE exec says it’s very hard to dislodge an incumbent in a deal. 3Par’s board has already signed onto Dell’s original and revised takeover offers . “This is far from over and ultimately Dell will prevail,” the buyout exec says.