Dell Inc said on Sunday it was assessing its bid for 3PAR Inc

after the data storage company's board of directors late on Friday said Hewlett-Packard Co's $2 billion (1.3 billion pound) offer was a superior proposal.

The Fremont-California based 3PAR had also notified Dell Inc of its intention of terminating its merger agreement. Dell has three business days to match HP's offer under its merger agreement with 3PAR.

We will make a decision in the best interest of our customers and shareholders and make that known when it becomes appropriate, said Dell spokesperson David Frink.

A HP spokesperson decline to comment.

The move is the latest volley in an intense bidding war between technology giants HP and Dell for the high end data storage company 3PAR.

On Aug 27, HP raised its bid to $30 per share, or $2 billion, less than 3 hours after Dell announced 3PAR had accepted its bid of $27 per share, which matched HP's previous offer.

We have an existing agreement with 3PAR that gives us the right to match any competitive offer. We are assessing it at this time, Frink added.

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

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.

3PAR specializes in high-end data storage, a key part of cloud computing -- an increasingly popular technology that enables computer users to access data and software over the Internet, allowing companies to save costs.

The company competes with EMC Corp , NetApp Inc , IBM and other data storage companies, and 3PAR's expertise on the high end has made it particularly attractive.

In the last notable bidding war in the tech industry, EMC outbid NetApp last year to buy Data Domain for $2.4 billion. Data Domain was advised in that deal by Frank Quattrone, the same veteran technology banker who is advising 3PAR in the latest negotiations.

(Reporting by Jennifer Saba; Editing by Diane Craft)

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