Compellent Shares Decline on Dell Deal Talks

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.