Yes, you read that headline right. Shares of storage provider Compellent (CML) dropped sharply today after the company confirmed that it is advanced talks to be acquired by Dell for $27.50 a share. The problem? After recent storage deals in which 3PAR and Isilon Systems were acquired at hefty premiums, investors had bid up the price of Compellent shares to more than $33 a share. As a result, Compellent shares are off $4.44 to $29.21, a decline of 13 percent, in late morning trading.
“Dell and Compellent have entered into an exclusive agreement to negotiate a merger agreement in which Dell would acquire all of the outstanding common stock of Compellent at a price of $27.50 per share in cash,” the companies said in a press statement. “There can be no assurances that an agreement will be reached or that a transaction will be consummated. Dell and Compellent do not intend to comment further until an agreement is reached or discussions are terminated.”
Will a deal get done at $27.50? The stock price suggests that investors expect a higher bid from someone. After losing out to HP in a prolonged bidding war for 3PAR, will Dell move quickly to seal the deal? Stay tuned.