Dell pulled out of the race to acquire 3PAR Thursday morning after HP upped its $30-a-share bid of last Friday to $33 a share, pushing 3PAR's valuation past $2 billion to roughly $2.1 billion.

3PAR sent out a statement Thursday morning saying that Dell went to $32 before the three-day clock ran out on it Wednesday at midnight, and HP countered Thursday morning with $33.

The 3PAR board has recognized HP's revised $33 bid as the "superior proposal" and said it told Dell it would go with HP unless Dell put more money on the table under the perpetual matching rights clause in their original deal.

Dell followed an hour later with a statement of its own saying it's through. It'll get a $72 million termination fee.

Dave Johnson, the ex-IBMer who's now Dell's senior vice-president of corporate strategy, said in the concession statement, "We took a measured approach throughout the process and have decided to end these discussions."

It was obviously from the revised proposal that 3PAR said Dell put on the table when it went from $27 a share to $32 a share that 32 bucks was Dell's last gasp.

3PAR said Dell wanted a termination fee of $92 million, $20 million more than the termination fee negotiated last week, as well as a multi-year reseller agreement that HP would have been saddled with that 3PAR said "contained fixed pricing and other terms that the 3PAR board of directors determined to be unacceptable."

On Friday Dell matched HP's bid of $27 and 3PAR accepted Dell offer. HP immediately went to $30 and last Friday night 3PAR's board acknowledged HP's money was a "superior offer" to Dell's and told Dell it would terminate their merger agreement in three business days to go with HP unless Dell sweetened the deal.

Wall Street thought Dell would up HP's $33 bid because 3PAR stock started trading at $33.60 a share on the news of HP's revised offer.

Two weeks ago Dell thought it had 3PAR in its pocket at $18 a share, roughly $1.15 billion, a few bucks more a share than it actually wanted to pay. HP upset the apple cart a week later with an unsolicited bid of $24 a share, starting last week's run-up.

• HP Reported Buying ArcSight Next