HP snaps up rival ArcSight

City A.M. Reporter

Hewlett-Packard, the world’s top personal computer maker, said it will buy security software firm ArcSight for $1.5bn (£971m) in cash yesterday to further diversify its computer business.

The $43.50-a-share offer is a 24 per cent premium to ArcSight’s Friday close of $35.10 on Nasdaq.

Shares were trading at $44.36 in heavy premarket trading yesterday, indicating that some shareholders are looking for a higher bid.

The acquisition is expected to close by the end of the year and is HP’s second major deal since the departure of Mark Hurd as chief executive.

Hurd, who left HP after he was accused of falsifying expense reports and concealing a relationship with a female contractor, is now a co-president at rival US technology company Oracle.

Earlier this month, HP won a bidding war against rival Dell to buy data storage company 3PAR for $2.4bn.

The deal is also the latest sign of consolidation in the security software sector. Last month, Intel agreed to buy McAfee for $7.7bn. In May, Symantec bought Verisign’s payment authentication unit for about $1.3bn.

HP’s shares are down 17.5 per cent since Hurd resigned.