HP Trumps Dell's $32 / Share 3PAR Offer with $2.4B $33 / Share Bid

September 2, 2010

3PAR has received a revised proposal from Hewlett-Packard Company (“HP”) to acquire all of 3PAR’s outstanding common stock at $33 per share, which is an increase from its previously announced offer price of $30 per share.

The 3PAR board of directors has determined that HP’s revised proposal constitutes a “Superior Proposal” (as that term is defined in 3PAR’s merger agreement with Dell). Accordingly, 3PAR notified Dell of its intention to terminate its merger agreement with Dell immediately following the expiration of the three business day period contemplated by, and the satisfaction of the other conditions set forth in, its merger agreement with Dell in order to enter into a merger agreement with HP on the terms set forth in HP’s revised acquisition proposal.

Dell will not increase its most recent proposal to acquire 3PAR, and that Dell has ended its discussions regarding a potential acquisition. Dell is entitled to receive a $72 million break-up fee from 3PAR upon the termination of its merger agreement.

Dell’s final offer to acquire 3PAR was not accepted by 3PAR’s board of directors. Dell’s improved offer included a proposed commercial relationship and an increased break-up fee.

“We took a measured approach throughout the process and have decided to end these discussions,” said Dave Johnson, senior vice president, corporate strategy.

“We will continue to put the interests of our customers and shareholders at the forefront of all our decisions,” said Brian Gladden, chief financial officer . “Our focus is to create long-term value.”

Dell is focused on creating open, affordable and capable enterprise solutions designed to help customers. The company has a portfolio of enterprise solutions, including servers, storage, networking and services. Dell’s commercial enterprise solutions revenue grew 43 percent year over year in the company’s second fiscal quarter and is now a $17 billion annualized business.

“We believe our strategy of creating open, affordable and capable solutions resonates well with customers and will enable us to continue to outgrow the industry,” said Mr. Johnson.

Although 3PAR previously notified Dell of its intention to terminate its merger agreement with Dell, the merger agreement was not terminated and remains in full force and effect. Following 3PAR’s notice of intent to terminate the merger agreement, and prior to receiving HP’s revised acquisition proposal, 3PAR received a revised acquisition proposal from Dell in which Dell increased its offer price from $27 per share to $32 per share. Dell’s revised acquisition proposal also included an increased termination fee of $92 million payable by 3PAR to Dell as a condition to accepting a “superior proposal,” and a multi-year reseller agreement with Dell, which would by its terms be assumed by an acquirer of, or successor in interest to, 3PAR in the event of a change in control of 3PAR (including the acquisition of 3PAR by HP or another third party), and which contained fixed pricing and other terms that the 3PAR board of directors determined to be unacceptable.

The terms of 3PAR’s merger agreement with Dell require the 3PAR board of directors to continue to recommend that 3PAR stockholders accept Dell’s cash tender offer, and tender their 3PAR shares pursuant to Dell’s tender offer, so long as the merger agreement with Dell remains in effect. Accordingly, at this time, since the merger agreement between 3PAR and Dell remains in effect, 3PAR’s board of directors continues to unanimously recommend that 3PAR stockholders accept the cash tender offer made by Dell and tender their shares of 3PAR common stock pursuant to such offer.