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.