Technology giants, Hewlett-Packard and Dell are in a bidding war for what is called the last independent vendor of enterprise class data storage, 3Par.

The board of directors of 3PAR now debate over which way the company should swing. The acquisition will benefit both the companies as they will be able to strengthen their virtual storage capacity. Dell and HP are now aiming to build upon virtualized storage in order to help their customers consolidate storage space and also develop more storage.

In the bidding war, Dell had placed an offer valuing the company at $1.15 billion with $18 per share on August 16 which was soon topped by HP at $1.6 billion offer, or $24 a share. Dell responded by upping its bid to $24.30 per share and HP raised the offer to $27 per share, which Dell matched the very next day.

In its response today, HP raised the offer values to $2 billion with $30 per share. Some are saying that the bidding war may take the pierce to outrageous levels and the company may not be worth the value. However, HP has sophisticated financial models and knows how far it will go.

A senior HP official said in a press release that the company is an ideal march for 3PAR with its market reach and commitment to innovation. He also pointed out that the HP’s bid offers higher premium to the shareholders of
3PAR. The direct and indirect sales markets of HP could help 3PAR increase its volumes significantly.

If the board of 3Par plans to accept the HP offer it will have to pay a termination fee of $72 million to Dell which might not be a problem for the company after being valued at a whooping $2 billion.