(Reuters) - This satellite image, photographed by an Expedition 24 crew member on the International Space Station, shows an oblique view of the eye (center) of Hurricane Earl centered just north of the Virgin Islands near 19.3 north latitude and 64.7 west longitude packing 115-kilometer winds, August 30, 2010. The photo was taken with a digital still camera using a 50mm lens. Hurricane Earl gained more punch on September 2, 2010 as the large storm churned up the Atlantic threatening the U.S. East Coast with dangerous winds and large swells and forcing evacuations in North Carolina. Picture taken August 30, 2010. REUTERS/NASA/Handout (UNITED STATES - Tags: SCI TECH ENVIRONMENT) FOR EDITORIAL USE ONLY. NOT FOR SALE FOR MARKETING OR ADVERTISING CAMPAIGNS. THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY. IT IS DISTRIBUTED, EXACTLY AS RECEIVED BY REUTERS, AS A SERVICE TO CLIENTS

Dell Chief Executive Officer Michael Dell during his keynote address at Oracle Open World in San Francisco, October 13, 2009.

Credit: Reuters/Robert Galbraith

NEW YORK (Reuters) - Dell Inc dealt the latest blow in a bidding war over 3PAR Inc on Friday, sweetening its bid for the data storage company to $1.8 billion to match a rival offer from Hewlett-Packard Co.

Dell said 3PAR accepted its new bid $27 per share bid, which is up 10 percent from its last offer, under a provision in their existing agreement that allows Dell to match competing bids.

Dell’s bid puts the ball back in HP’s court and is unlikely to end the bidding war that has escalated this week.

HP, whose $115 billion in annual revenue compared with Dell’s $53 billion, has the firepower to increase its bid further but must also keep an eye on the richer valuation of the data storage company.

Earlier this week, a survey by Reuters of nine fund managers and analysts this week found that the average final price is expected to be about $29 per share.

3PAR’s shares were up 9.4 percent to $28.50 in premarket trading.

In a newspaper advertisement, placed overnight on Friday, HP launched a tender offer to buy all outstanding shares of 3PAR for $27 per share in cash.

The pursuit of 3PAR comes as HP and Dell, as well as other large technology vendors from International Business Machines Corp to Cisco Systems Inc, are trying to expand into new business areas.

The bidding war, a rare occurrence in the tech sector, started earlier this week when HP bid $24 a share for 3PAR, topping Dell’s $18-per-share deal.

Dell responded by striking a new deal with 3PAR at $24.30 per share and increasing the termination fee to $72 million from $53.5 million.

That prompted HP to come back with a $27 per share bid on Thursday.

(Reporting by Paritosh Bansal; Editing by Derek Caney)

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