Hewlett-Packard Co said on Monday its board approved the buyback of an additional $10 billion in shares, even as it finds itself involved in an escalating bidding war over high-end data storage company 3PAR Inc

HP is currently competing to acquire 3PAR in an intense auction that started last week with rival Dell Inc . On Friday, HP raised its bid to purchase 3PAR to approximately $2 billion.

At the same time, the world's top personal computer maker is casting about for a new chief executive. CEO Mark Hurd resigned from HP after an investigation found that he had falsified expense reports to conceal a close personal relationship with a female contractor.

HP interim CEO Cathie Lesjak said in a statement that HP plans to repurchase at least $3 billion worth of shares in the fiscal fourth quarter.

This increased authorization will ensure that we have sufficient capacity to continue to be active in repurchasing our shares prior to our fiscal fourth-quarter earnings announcement in November, Lesjak said in a statement.

HP had repurchased about $2.6 billion of its shares in its fiscal third quarter as part of an $8 billion repurchase plan approved in November 2009. Under that authorization, HP has approximately $4.9 billion remaining to buy back its stock.

It said on Monday that the additional $10 billion is part of an effort to manage the number of outstanding shares in existence. Programs like employee stock plans tend to increase the overall amount of stock in the market, and HP said the buyback would help counter that dilution.

HP had $14.7 billion in cash and equivalents as of the third quarter ended July 31, with a market capitalization of $88.7 billion.

Shares of HP are up almost 3 percent to $39.11 in morning trade on the New York Stock Exchange.

(Reporting by Jennifer Saba, editing by Gerald E. McCormick)