Hewlett Packard trumps Dell with $1.6bn bid for 3PAR

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Hewlett Packard headquarters in Palo Alto
Image caption,
HP wants to diversify away from computer making

Computer maker Hewlett Packard (HP) has launched a $1.6bn (£1bn) bid for data storage firm 3PAR, trumping a $1.2bn offer made by rival Dell last week.

Along with IBM, the two firms are looking into more profitable business areas outside of making computers.

The bids come as part of a glut of merger and acquisitions activity in the technology sector, including last week's $7.8bn bid for McAfee by Intel.

The HP bid pushed Wall Street higher in early trade, before shares lost ground.

On a day of light trading, the main Dow Jones index closed down 0.4% at 10,174 points.

Shares in 3PAR rose almost 45%, while those in HP slipped 2%.

'Good fit'

HP said that, if its offer was accepted, the deal should be closed by the end of the year.

Analysts said the battle between two of the world's three largest computer makers to gain control of 3PAR showed their determination to move into so-called cloud computing - technology that allows access to data servers over the internet.

"One of the growth areas in technology is in the enterprise storage space," Joel Levington at Brookfield Investment Management told Bloomberg.

"3PAR's products fit in well there. It's an easy way to gain product breadth."

He also expressed doubts about whether Dell would be able to match HP's offer.

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