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By Matthew Quinn
In the war for Data Domain, it's beginning to feel like the data deduplication company would rather end up in the arms of NetApp than EMC. And price may not be the only issue.
Certainly the clearest signal is that Data Domain yesterday accepted NetApp's revised offer of $30 per share in cash and stock over EMC's $30 per share all-cash offer.
"We are pleased with the revised terms of NetApp's acquisition offer and feel it will provide great value to our shareholders and customers," said Frank Slootman, president and CEO of Data Domain, in a statement.
Data Domain accepted the offer a day after it was made by NetApp. But the decision to shun EMC wasn't a hasty one. According to Reuters, EMC and Data Domain had previously held several discussions about business partnerships and even an acquisition. Those conversations fell short of a deal, however.
Joe Tucci, EMC's chairman and CEO, appears to think the two companies had something special. As the Reuters article pointed out, Tucci complained in a June 1 letter to Slootman that EMC didn't get a chance to bid for Data Domain before the company's board accepted NetApp's offer.
Tucci believed this shouldn't have been the case, "particularly since I believe you should have been aware of our interest."
Of course, this could be a game of cat-and-mouse on the part of Data Domain's board of directors, as it tries to solicit a higher offer from EMC.
But considering that Data Domain and EMC had held talks about how best to work together previously, it looks like Data Domain's management has simply concluded that NetApp is a better fit.
More haggling could be on the way, though. EMC issued a statement following the news that Data Domain accepted the revised offer, insisting it had the better offer on the table.
"EMC's all-cash tender offer remains superior to NetApp's proposed part-stock merger transaction," Tucci said. "We are proceeding with our superior cash tender offer, which is not subject to any financing or due diligence contingency. We do not believe that the Data Domain stockholders will approve the merger transaction with NetApp."
Data Domain shares continue to trade well above the $30 mark, opening at $32.61 this morning.
Your move, EMC.
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