Dell is expected to soon give up its pursuit of 3PAR, either ceding to HP’s last offer of $30 per share or giving up at a few dollars higher, according to a Reuters survey of eight technology investors and analysts. * View article *Columnist Robert Cyran asks: Is 3PAR an overpriced bauble for HP?  * An MSN article makes the case that both Dell and HP are certifiable.

AIG faces the prospect of looking for another buyer for its Taiwan unit after regulators threw out its proposed $2.2 billion sale of Nan Shan Life to China Strategic.  There have been suspicions in Taiwan about the connections of China Strategic with political foe China, and concern it did not have the experience to run an insurance business.  * View article

Some high-profile IPO’s are under water and this is not sitting well. “Investors are sick to the back teeth of being treated like idiots,” Dan Nickols, at Old Mutual Asset Managers, tells the Financial Times. *View FT article

Sometimes an ounce of prevention is worth a pound of cure. Case in point: Hewlett-Packard. Like many tech concerns, it is sitting on a large cash pile. But the company’s bidding war with Dell for control of 3PAR raises fears it may squander its $15 billion hoard on overpriced baubles. Promising to repurchase $10 billion of stock soothes investors. Refraining from such battles would be more effective.

HP’s investors were already shaken by the surprise booting of chief executive Mark Hurd from the company. Making three bids in one week for 3PAR made them feel queasier. The stock lost another 5 percent of its value last week, bringing its total losses since the start of the year to about 25 percent. HP may fear the strategic implications of a Dell victory, but agreeing to pay $2 billion net of cash — or more than three times the undisturbed price — for 3PAR appears undisciplined.
Promising investors to return some of their cash is a sensible move. It reminds them that HP has a good record in rewarding despite a steady history of acquisitions. Since the existing buyback program is running low, it was natural to replenish the fund — especially if the company feels its stock is priced at bargain levels.

Investors should be comforted by the fact the buyback lessens the chances that cash burns a hole in HP’s pocket. The authorization is about equal to a year’s worth of free cash flow. Of course, a better way to lessen investors’ fear of HP squandering their money would be to avoid irrational acquisitions, like the bid for 3PAR, altogether.

“Let me in and I might go higher.” That in a nutshell is the message Sanofi-Aventis chief executive Chris Viehbacher is sending Genzyme’s management in making public his $18.5 billion offer to buy the U.S. biotech company. The all-cash structure is intended to show that the French pharmaceuticals group is serious. But the lowball $69-a-share price has failed to move Genzyme’s board. Viehbacher will be hoping that changes — his threat of a hostile bid looks hollow for now.

One of his problems is that the price is hardly going to bowl Genzyme’s shareholders over. Despite amounting to a near-30 percent premium over the undisturbed price before rumours started flying more than a month ago, Sanofi’s offer values its target at about four times sales when biotechs usually go for five or six times.

His other problem is that without Genzyme’s cooperation, the U.S. company’s shareholders will know that any sweetening of an offer would be limited by uncertainty — say to around $70 a share, the level news reports suggest Sanofi’s board has authorized. That’s because to have greater clarity, the French group would prefer first to have a good look at its target’s books to help assess the extent of the industrial problems that have caused Genzyme to operate under the close monitoring of the U.S. Food and Drug Administration.

So while Viehbacher’s move may look like a step towards hostility, Sanofi would do better to avoid taking that road. Rather, the French group may be betting that in going more public with its offer, some Genzyme shareholders will pressure their board to talk in the hope a significantly higher price would be forthcoming for a friendly deal.

After all, Sanofi could easily afford to pay more. At $77 a share, for instance — roughly mid-way between the current offer and the price that would accord Genzyme a valuation multiple at the lower end of usual biotech deals — funding the $20.5 billion purchase would only take Sanofi’s debt to about 1.5 times its EBITDA. But for now Sanofi doesn’t want to go higher until it knows exactly what it would be buying, while Genzyme isn’t letting the French group in without a higher price. It’s a game of chicken.

Genzyme broke its five-week silence to reject an $18.5 billion takeover proposal by French drugmaker Sanofi-Aventis, dismissing it as opportunistic and too low. *View article *View Genzyme’s letter to Sanofi-Aventis

Intel will buy Infineon’s wireless unit for $1.4 billion, enabling the chipmaker to boost its presence in the smartphone market. This is the second major deal for Intel within two weeks after the company announced its $7.7 billion offer for McAfee on Aug 19. *View article

Is Cisco in deal talks with Skype? A TechCrunch source says Cisco has made an offer for the Internet phone services provider. Earlier this month, Skype filed for an IPO. *View article

3M said it agreed to buy Cogent for more than $900 million, paying a nearly 18 percent premium for the biometric identification systems company. 3M estimates the $4 billion biometric market will grow by 20 percent a year. *View article

Agrium said it would be interested in Potash Corp’s nitrogen and phosphates business, worth an estimated $12 billion, if miner BHP Billiton secures its $39 billion Potash takeover and decides to sell the assets. BHP Billiton says they have no plans to sell any Potash Corp assets. *View article *View article on BHP’s top deal maker, Alberto Calderon *View analysis on China’s growing appetite

If there were any questions about whether Frank Quattrone could successfully return to the frontline of investment banking after a five-year legal fight, they have been put to rest by his role in advising 3PAR. *View article

Websense is open to takeover bids after rival McAfee was snapped up by Intel. “In my experience the way that you position yourself for sale is not to go around saying, ‘I am for sale,’” Chief Executive Gene Hodges told Reuters. “It’s to win in the marketplace and make sure that potential suitors know what your unique assets are.” *View article

Spain’s two largest banks have always been fiercely competitive — both within the country’s borders and beyond. The battleground today is the United States. But, Santander and BBVA are following radically different strategies to crack this giant market.

It’s too soon to tell who will come out on top, and neither lender has covered itself in glory so far. But, if Santander’s talks with Buffalo-based M&T Bank lead to a deal, it will be much closer than BBVA to clinching its American dream.

BBVA’s U.S. adventure began in 2004 with the takeover of Laredo National for $850 million, or nearly three-times book value. The idea was to exploit trade flows between BBVA’s strong Mexican franchise and Hispanics across the border.

Since then, BBVA has added four more banks. That includes spending $9.6bn, or 3.5-times book, for Alabama’s Compass Bancshares in 2007, only to see the market tank. BBVA wrote-off 704 million euros in goodwill on its U.S. franchise at the end of 2009.

By contrast, Santander has targeted the more affluent northeast coast. Its U.S. foray began badly in 2006, after it controversially bought a pricey 20 percent stake in Sovereign Bancorp. A $1.08 billion (737 million euros) charge followed when recession hit. True, Santander bagged the rest of the bank for a knock-down price, but only after it had injected another $347 million in 2008 in Sovereign’s last-ditch capital hike.

The worst is behind both lenders. Both have cut costs drastically in their U.S. operations. In the first half of this year, BBVA’s U.S. business contributed 555 million euros to operating income, against 580 million euros for Santander’s. Both operations have about 750 branches. But, the big difference is that BBVA’s $12.7 billion expansion bill is more than double Santander’s.

BBVA’s last U.S. purchase, the FDIC-sponsored purchase of Guaranty Financial in Texas, was shrewd and opportunistic. The snag for BBVA is that it’s not clear where it goes from here. There aren’t too many targets left in Texas, and shareholders may take some convincing to back another big bet in the United States, bankers say.

Yet, Santander is busy plotting its next big move — a potential deal with M&T, valued at $10 billion. The operations of the New York bank stretch from Washington, D.C., to Canada. The deal would be a clever way to gain critical mass, good management and savings without splashing too much cash. Santander’s presence would virtually double in one swoop. Doubtless Santander wants its U.S. franchise to be worth more than BBVA’s. While much depends on the terms of future deals, it looks on track.

Consumers may still be deleveraging, but at big corporations it’s liquidity galore. How else to explain the curious case of the bidding war over 3PAR, a data storage company coveted by Dell and Hewlett-Packard? There’s no sound mathematical rationale for the 3PAR frenzy, which has now reached $2 billion with HP’s third counter-offer to Dell.

Only a highly creative financier with a spreadsheet and a bong could justify the valuation on HP’s latest bid — the sixth for the company in three weeks. HP is offering $30 a share — more than three times 3PAR’s $9.65 undisturbed price as of Aug. 13. Plus, HP will pay a $72 million termination fee if it clinches the deal.

Let’s put that into Excel and smoke it. Assume HP — or Dell for that matter — really can pump up the sales volume of 3PAR by stuffing it through its distribution pipeline. Consensus estimates compiled by Thomson Reuters show the company is already expected to improve sales from $195 million last year to $460 million by 2014.

Say 3PAR’s new owner can supercharge that growth, doubling sales to $920 million instead, while maintaining projected operating profit margins of 11 percent. That gives earnings before interest and tax of just over $100  million. Taxed at 30 percent and discounted, that suggests a return on HP’s all-in investment of just around 3 percent.

That’s way below 3PAR’s cost of capital. Of course, HP might argue it’s not a bad use of a portion of the cash sitting on its balance sheet. It’s certainly a better return than five-year Treasury bills are offering. And maybe the inclusion of 3PAR’s kit to its offering will help it sell all sorts of other goods and services.

The trouble is, shareholders of CEO-less HP and direction-seeking Dell might see things differently and have better ways to deploy the cash they effectively own. HP’s owners have lopped more than $5 billion off the company’s market value this week. That says plenty about how they view HP’s creative use of their capital.