Buy Me Or I’ll File
The 3Par saga is finally over, and the Company with the larger resources and most similar channel won. HP is buying 3Par for $33/share or $2.4B in value. This is over 3x where the Company’s stock was trading before the battle begun.
3Par is a classic example of why many private companies go “on file” (meaning, file their S-1) to drive an M&A process. If you are a unique company with technology and sufficient scale to go public, that should be a pretty desirable asset. But many times you need to create a compelling event to get buyers to take a process seriously. By filing an S-1, you are telling a broad audience that you intend to go public. Once public, there are a whole new set of fiduciaries the Company becomes obligated to and new set of disclosure obligations. For example, in 3Par, all bidding happened formally and publicly. Dell had no ability to lock the deal up and drive it to a close. Their foresight and brilliance tipped others into action. We saw the same with EMC, when they swooped in on DataDomain and took them away from NetApp.
If either of these companies chose to buy 3Par when it went public in November 2007, they would have saved over $1.8B! There are many companies on file today that don’t really want to be public. It’ll be interesting to see if these recent public battles spark others into action sooner.