EMC Raises Data Domain Offer
In a letter to Data Domain’s board of directors, EMC CEO Joseph Tucci said the EMC offer is “far superior” to the latest $30-per-share bid from Sunnyvale, CA-based NetApp (NASDAQ: NTAP)—in part because EMC has received permission from the Federal Trade Commission to acquire Santa Clara, CA-based Data Domain without further regulatory review. That means EMC could complete the acquisition within as little as two weeks, Tucci wrote.
To make it easier for Data Domain (NASDAQ: DDUP) to say yes, EMC has also removed the “deal-protection” provisions that went along with its earlier offer, including a termination fee.
Both EMC and NetApp would like to acquire Data Domain for its advanced deduplication technology, which removes redundant information from corporate data streams before it’s archived, saving storage space. Data Domain officials have not commented on the latest EMC bid, but in June the company recommended that its shareholders reject EMC’s offer. NetApp, meanwhile, said today that it has received clearance from the Securities and Exchange Commission to proceed with the acquisition.
Data Domain may be in an awkward spot between two aggressive suitors, but the situation has certainly helped the company’s own stock price. Data Domain shares have shot up from about $15 before NetApp’s initial $25-per-share acquisition proposal in late May to more than $34 today—perhaps reflecting shareholder expectations that the bidding will go even higher.
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