By Jennifer Saba

NEW YORK (Reuters) - Hewlett-Packard Co
said Monday its board approved the buyback of an additional
$10 billion of shares to boost investor confidence as it finds
itself involved in a bidding war for high-end data storage
company 3PAR Inc.

HP, the world's top personal computer maker, and Dell Inc
are competing to acquire 3PAR in an intense auction
that started last week. On Friday, HP raised its bid for 3PAR
to approximately $2 billion .

The company is also casting about for a chief executive to
replace Mark Hurd, who resigned as CEO on Aug. 6 after an
internal investigation found he had falsified expense reports
to conceal a "close personal relationship" with a female
contractor.

Analysts saw the announcement of the buyback as a message
to investors that the company is stable and financially strong.

"It's trying to demonstrate that it's on solid footing and
not drifting without a leader," said Morningstar analyst
Michael Holt.

HP interim CEO Cathie Lesjak said in a statement that HP
plans to repurchase at least $3 billion worth of shares in its
fiscal fourth quarter, which began Aug. 1.

Jeffrey Fidacaro, analyst at Susquehanna Financial Group,
said he was encouraged by the announcement and is nudging up
his estimates on HP's earnings for the 2011 and 2012 fiscal
years.

He now sees 2011 earnings of $5.05 per share, a penny above
his earlier forecast, and 2012 profit of $5.57 a share, two
cents higher than before.

HP bought back $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 had $4.9 billion
remaining to buy back its stock as of the end of July.

There is no time limit on either program.

The company, in a statement, said 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 of cash and equivalents as July 31,
and a current market capitalization of nearly $90 billion.

Shares of HP were up 2.4 percent, at $38.92 in afternoon
trade on the New York Stock Exchange.
(Reporting by Jennifer Saba; additional reporting by Liana B.
Baker; Editing by Gerald E. McCormick and Steve Orlofsky)