HP’s fighting words on Dell buyout continue rivalry

A 3Par deal was the excuse for a bruising Dell/HP slugfest in 2010.
A 3Par deal was the excuse for a bruising Dell/HP slugfest in 2010.
Image: AP Photo/Paul Sakuma
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Hewlett-Packard’s quick smackdown of the $24.4 billion leveraged buyout of Dell announced today shouldn’t be surprising given the tech companies’ entangled history.

Shortly after Dell announced it would be taken private by its chief executive Michael Dell, private equity firm Silver Lake and Microsoft, HP put out this statement:

“Dell has a very tough road ahead. The company faces an extended period of uncertainty and transition that will not be good for its customers. And with a significant debt load, Dell’s ability to invest in new products and services will be extremely limited. Leveraged buyouts tend to leave existing customers and innovation at the curb. We believe Dell’s customers will now be eager to explore alternatives, and HP plans to take full advantage of that opportunity.”

The two companies have dueled before. Dell and HP went head-to-head in 2010 in a knockdown, bruising battle over storage system maker 3Par. Dell had the initial agreement to buy 3Par for $18 a share when HP stepped into the mix. For 18 days, the companies one-upped each other, with Dell going as high as $32 a share.

In the end, Dell decided to walk away and HP ended up with 3Par for $33 a share, an astounding increase from the initial Dell deal offer. Critics complained that HP overpaid tremendously for 3Par.

But many tech industry watchers at the time speculated that HP cared more about beating Dell than anything else. HP’s fighting words today show it is honoring tradition.