What’s another $200 million between rival bidders? Less than three hours after Dell matched HP’s $1.8 billion bid for data storage specialist 3PAR, HP upped the ante to an even $2 billion. The HP offer shakes out to $30 per share. 3PAR shares were up another 20 percent to $31.29 in early trading, according to Reuters. *View article*

FT blogger Gwen Robinson wondered how 3PAR became the target of such an intense bidding war and suggested it may be “simply a throwback to those crazed acquisitive days of the dotcom boom.” *View article*

In another software play, HP is rumored to be a potential bidder for security software maker ArcSight Inc. According to the Wall Street Journal, bidders, including Oracle and HP, could pay up to $1.5 billion for the company. Other ArcSight competitors could include EMC, IBM and CA Inc. *View article*

This month’s $200 billion in takeover announcements is unlikely to assuage fears of a double-dip recession, analysts told Reuters. “For now, the dominant factor on the market remains the U.S. and Chinese slowdown in growth,” Alain Bokobza, head of global asset allocation at Societe Generale CIB in Paris, told Reuters. *View analysis*

Trumping HP’s bid by 30 cents a share, Dell offered, and 3PAR accepted, $1.6 billion for the data storage company. *View article *View analysis on valuations taking a back seat to egos

Fast money is building in Potash Corp after BHP Billiton’s hostile bid, but the sheer size of the potential deal could limit the sway arbitrageurs and hedge funds have on the outcome, writes Michael Erman. *View article *Full coverage *View WSJ’s blog on how to say “Potash”

Take a look at what could be Phil Falcone’s riskiest trade ever in a special report on the hedge fund manager’s wireless broadband technology bet. *View article

The private equity sector is responding to the new world order: less capital, less profit and more accountability. *View Bloomberg article

Half a billion dollars is normally sufficient to sway the minds of mortals. But in the case of Potash Corp’s potential sale to BHP Billiton, don’t expect such a big payday to decide the outcome of the deal. The fertilizer miner’s boss Bill Doyle has sat on larger sums before and held tight. With his golden parachute less than 6 percent of the payoff, he has no obvious incentive to shortchange shareholders with a quick flip of the company.

True, even if Potash shareholders go for the BHP deal on offer Doyle would become one of the top corporate earners of the past decade in North America. And it’s hard to imagine that so lucrative a package of stock options as Potash doled out to Doyle was entirely necessary to motivate him over the years.

Still, it is difficult to build up much moral outrage when a $100 investment in the firm when he took over in July 1999 would now be worth $1,746. Not only has the stock soared above Canada’s TSX 60 index, it has also dwarfed returns for rivals Mosaic and Agrium.

Whether Doyle feels inclined to collect his prize is another matter. Even before BHP came along, his holdings were worth around $380 million — enabling him to exit a wealthy man. At BHP’s $130 a share bid, the Potash potentate would collect $445 million in stock alone. At $146, the current price of Potash stock, he’d receive $500 million.

But Doyle, 60, has some reason to be confident this value would not disappear if BHP failed to take control. At the height of the food crisis two years ago Potash stock topped $230. Many of the trends that powered this surge — notably the change in dietary habits in fast-growing developing economies — remain in place.

There’s an extra fillip for Doyle in selling, of course. He’d get $28 million in severance and accelerated stock options from a change of control. But at just 6 percent of the current value of his options, it’s hard to see that as a motivating force, not least because he’d eventually receive much of that money anyway, according to compensation experts at The Corporate Library.

Chief executives regularly downplay personal motives that could create conflicts with shareholder interests. And Doyle’s assertion that he doesn’t care about the money strains credulity. Even so, his incentives are aligned with those of other shareholders. BHP can’t rely on impatience from Doyle to get Potash at a bargain price.

BHP Billiton has shown it doesn’t need to buy Canada’s Potash Corp. The Anglo-Australian miner’s impressive annual results are a reminder of the financial firepower behind its $39 billion hostile bid for the world’s largest fertiliser group. But they also show that BHP is not broken — and that chief executive Marius Kloppers does not need to bet a strong balance sheet on further diversification.

The miner can clearly afford to pay more than the $130 per share offer that it has taken directly to Potash’s shareholders. BHP generated EBITDA of $24.5 billion in the year to June 30, up 10 percent, driven by record production in oil and iron ore. At the end of the financial year, gearing stood at just 6 percent.

Still, BHP has yet to make a compelling strategic case for buying Potash. The miner is already sufficiently diversified by customer, commodity and geography to have delivered its sixth consecutive year of 40 percent plus operating margins despite the global financial crisis. The offer for Potash, if successful, would deprive BHP investors of a significant potential cash return.

With an increasing correlation between commodities and associated equity plays over the past two years, it is hard to see how BHP benefits by adding a tenth division. Potash might even be worth more standalone than within the miner, argues Citigroup, which says the fertiliser group would have increased the volatility of BHP’s earnings on a historic basis. So much for the benefits of extra diversity.

BHP has said it will remain financially disciplined, and its current bid doesn’t look overpriced. If the miner raises its offer to the $150 level where Potash’s New York listed shares are now trading, it will need to seek the approval of its own shareholders. BHP’s shares trade on a forward price to earnings ratio of 7.4 times, a slight premium to the sector. Given Kloppers’ advantageous position, the temptation to let discipline slip will be strong. But he can also afford to walk away should Potash’s shares run away from him. If he wants to avoid turning BHP’s premium into a discount, he must be prepared to do so.