EMC escalates bidding war for Data Domain with $2.1-billion offer
07 Jul 2009
The bidding war for Data Domain between EMC and NettApp escalated yesterday after EMC once again raised its all-cash offer from $1.8 billion to $2.1 billion, outbidding NetApp's revised stock and cash offer of $1.9 billion.
Not waiting for the expiry of its 10 July extension for the $30 per share offer valuing Santa Clara, California-based Data Domain at approximately $1.8 billion, (See: EMC Corp extends Data Domain offer period to 10 July) EMC, increased its offer yesterday to $33.50 per share in cash, taking the total enterprise value to approximately $2.1 billion.
In submitting its revised proposal to Data Domain's board of directors, EMC, the world's largest data storage company, emphasised that its all-cash offer is clearly superior to NetApp's revised $30 per share stock-and-cash proposal, valuing Data Domain at $1.9 billion. (See: NetApp ups offer for Data Domain with $1.9 billion)
The Hopkinton- (Massachusetts) based Fortune 500 company, EMC also said that it is prepared to close the transaction within two weeks, which is almost a month faster than the NetApp proposal and further added that it would remove the break-up fee and other deal protection clauses in the revised offer that could further impede the maximisation of stockholder value for Data Domain stockholders.
The NetApp offer has a termination fee of $57 million, which Data Domain would have to pay NetApp if it walks away from the deal.
Although Data Domain has not commented on the new offer by EMC, NetApp chief executive Dan Warmenhoven said, ''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,'' and added, ''We will provide an update shortly.''
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