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UPDATE 2-HP to buy ArcSight for $1.5 bln

Published 09/13/2010, 08:55 AM
Updated 09/13/2010, 09:00 AM

* Says to buy ArcSight for $43.50/shr, a 24 pct premium

* HP's second major acquisition since Mark Hurd departure

* Latest sign of consolidation in security software sector

* Shares up 26 percent in premarket (Adds premarket share prices, background)

NEW YORK, Sept 13 (Reuters) - Hewlett-Packard Co , the world's top personal computer maker, said it will buy security software firm ArcSight Inc for $1.5 billion in cash on Monday to further diversify its computer business.

The $43.50-a-share offer is a 24 percent premium to ArcSight's Friday close of $35.10 on Nasdaq. Shares were trading at $44.36 in heavy premarket trading on Monday, 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 Oracle Corp .

Earlier this month, HP won a bidding war against rival Dell Inc to buy data storage company 3PAR Inc for $2.4 billion. [ID:nN02238002]

The deal is also the latest sign of consolidation in the security software sector. Last month, Intel Corp agreed to buy McAfee Inc for $7.7 billion. In May, Symantec Corp bought Verisign Inc's payment authentication unit for about $1.3 billion [ID:nN19267038].

Shares of HP, a Dow component, rose 16 cents to $38.44. (Reporting by Liana B. Baker in New York and Sayantani Ghosh in Bangalore; Editing by Anne Pallivathuckal and Derek Caney)

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