Putting to rest weeks of speculation, Dell announced today that it is in “advanced discussions” to buy Compellent for $27.50 per share, or approximately $876 million. The weird thing about this is that the $27.50 offer is about 18% less than Compellent’s closing price yesterday. That’s a rarity in the high-tech acquisition space, and the financial folks refer to it as a “take-under.”

It looks like I will be proved wrong. Although many financial analysts predicted that, after losing the battle with HP for 3PAR, Dell would set its sights on Compellent, I predicted that Dell would turn away from the over-priced storage stocks and make a few acquisitions in non-storage IT sectors.

As I write this, Compellent is trading at $29.37 per share. That would suggest that investors think that (a) a bidding war will ensue and/or (b) negotiations will drive the price up.

I doubt that a bidding war will ensue, mainly because none of the cash-rich storage giants really need Compellent’s technology (although at least one financial analyst predicted that NetApp might jump into the ring). Making a bidding war even less likely: Dell has more than $13 billion in cash, and even though it backed out of the 3PAR bidding there’s no way Compellent will go for much more than $1 billion vs. the $2.4 billion that 3PAR commanded.

Compellent’s stock has almost doubled over the past couple months due to acquisition rumors. And back in August (prior to the start of the 3PAR bidding contest) the stock was trading at about $12 a share.

If this deal goes through, it will be interesting to see how Dell positions Compellent’s products relative to Dell’s (enormously successful) EqualLogic line. There’s certainly a good deal of overlap there. But what will be more interesting is what happens to the Dell-EMC relationship, or lack thereof.

Both Dell and Compellent officials said that there was no assurance that the acquisition deal will be finalized, and they don’t plan to comment further until the deal is either consummated or goes south.

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