Dell in talks to buy data storage firm Compellent for $876 million

After losing out to Hewlett-Packard in a bidding war for 3PAR, computer maker Dell today revealed that it is in advanced talks to acquire mid-range data storage firm Compellent Technologies, for $876 million in cash.

Dell said that it and Compellent have entered into an exclusivity agreement to negotiate a merger agreement, in which Dell would acquire all of the outstanding common stock of Minnesota-based Compellent at $27.50 per share.

The offer represents a discount of 18 per cent over Compellent's closing price yesterday.

The unprecedented bidding war in September 2010 for 3PAR (See: HP knocks out Dell for 3PAR with $2.4-bn bid) a virtual data storage company that barely made a profit in its 11-year existence, had sent the stock price of data storage companies in the US skyrocketing.

HP won 3PAR on 2 September with an offer that was at a 348 per cent premium to the $9.65 per share price of 3PAR prior to Dell's first bid, made on 16 August 2010.

The Compellent stock, which was quoting at $12.75 in July, shot up by 140 per cent in August 2010 and soared even higher this week to $33.65 on speculation that Dell was making a play for Compellent.