EMC Makes Data Domain an Offer It Probably Can't Refuse
NetApp has cleared all necessary U.S. regulatory hurdles to proceed with its acquisition of Data Domain, though it seems unlikely that the company will prevail now that rival EMC has trumped its bid for the storage vendor.
This morning, EMC raised its offer for Data Domain to $2.1 billion from $1.8 billion, an 11 percent increase over its previous all-cash bid. Data Domain’s board had previously recommended that shareholders reject EMC’s $30-a-share cash bid in favor of a $30 cash-and-stock offer from NetApp (NTAP).
Hard to see the board doing so again now that the EMC (EMC) has sweetened the financial end of its proposal and removed some deal-protection provisions with which Data Domain (DDUP) had taken issue. With those gone, EMC’s bid is clearly superior to NetApp’s, CEO Joe Tucci claims, and it would be hard to argue otherwise.
“Over the past several weeks we’ve received strong support from many Data Domain stockholders and customers, validating our belief that EMC is Data Domain’s best choice,” Tucci wrote in a letter to Data Domain’s leadership. “With regulatory requirements now fulfilled, and in light of the clearly superior proposal we submitted to Data Domain’s Board of Directors today, we expect Data Domain to sign our definitive agreement that will deliver superior value in cash to the Data Domain stockholders in as little as two weeks.”
Data Domain has until midnight on July 17 to accept the offer.
UPDATE: NetApp responded to EMC’s announcement with the following statement:
“In response to EMC’s revised, unsolicited offer, the NetApp Board of Directors will carefully weigh its options, keeping in mind both its fiduciary duty to its stockholders and its disciplined acquisition strategy. We will provide an update shortly.”