HP wins bidding war over 3PAR

Dell pulled out of the bidding for data storage firm 3PAR on Thursday, handing Hewlett-Packard a victory and an important foothold in the rapidly-expanding market for cloud storage.

The announcement came just hours after HP had increased its bid to $33 per share, or $2.1 billion, topping Dell's last offer of $32 per share. Under the terms of a previous merger agreement Dell is entitled to a termination fee of $72 million. Dell originally agreed to purchase 3PAR for $18 a share on Aug. 16; prior to that announcement the company's stock traded for slightly less than $10 per share.

“We took a measured approach throughout the process and have decided to end these discussions,” said Dell Senior Vice President of Corporate Strategy Dave Johnson.

3PAR's leadership reportedly preferred Dell's offer because they believed the company would have more autonomy there than under HP, the world's largest PC manufacturer. In a statement 3PAR's board said HP's offers constituted a "superior proposal."

3PAR is considered a leader in producing hardware for corporate data centers and other institutions with high-end remote storage needs. The heated battle over the firm is evidence that neither Dell nor HP wanted its rival to gain an advantage in the market for cloud storage, which increasingly requires vendors to provide not just hardware but also software, support and hosting services.