EMC, NetApp, and Data Domain: The Tug-of-War Continues

You can look forward to at least two more weeks of fun and games around the tug-of-war match between data storage giant EMC (NYSE: EMC  ) and fast-growing upstart NetApp (Nasdaq: NTAP  ) . EMC just refiled its Hart-Scott-Rodino buyout notification with the FTC, so Data Domain (Nasdaq: DDUP  ) is still up for grabs, tempting storage efficiency products and all.

The refiling simply restarts the deadline for the $30-per-share hostile takeover offer to 15 days after the filing. I've been waiting for EMC's next move to see if it's one of the following:

  • A higher buyout price, meaning that EMC just wants to push NetApp out of its already-signed merger deal regardless of whether EMC actually intends on going through with its revised offer or not.
  • New terms of agreement. The current tender offer contains a few clauses that would let EMC back out of the deal at any time, and Data Domain's board probably won't endorse any EMC offer that doesn't trade these for comfy guarantees that papers will be signed and the merger consummated.
  • And of course, Data Domain's board and shareholders would love to see both of these things happening. That would breathe new life into the bidding war, for sure.

There's no new offer price, no new terms of agreement, and nothing else in the filing that would give us a hint as to what EMC really is up to. But EMC just gave itself another couple of weeks to think things over.

In the meantime, Data Domain's annual meeting is scheduled for July 2. The meeting's proxy filing clearly states that any and all merger debates and votes belong in a separate meeting, not in this yearly shareholder event. We'll see about that; I can't imagine that EMC and NetApp wouldn't send a few representatives to that meeting to stir up some discussion about the pink elephant in the room.

The plot thickens. Silicon Valley hasn't seen this much fun since Hewlett-Packard (NYSE: HPQ  ) bought Compaq.

Read up on the zigzag timeline of Data Domain's fate:

Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.


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  • Report this Comment On June 18, 2009, at 7:32 PM, John4762 wrote:

    I have posted similar comments about this battle, but it still applies.

    EMC seems to be only validating NetApp's place in the storage market with this fight. I have watched these two companies battle for many years and EMC has always simply ignored and/or dismissed NetApp's technology. Taking this tact seem to convince them that NetApp could not possibly have any real value in the storage market. A fear tactic tact that I believe has worked for them in the past and a fear they used to influenced potential customers. Is this tact not working any longer? Did NetApp successfully sneak up on them? Because it sure appears they really fear NetApp's move to acquire DD. Is that really something for EMC to fear? EMC's behavior on this acquisition sure implies that it is. I say "RELAX EMC", how could NetApp possibly hurt you? Why pay attention to them now? This battle for DD is only giving NetApp the better press by enlarge. EMC appears to be defensive and protecting their position. However, like in all sports, those who strike in response to anothers actions almost always get the penalty. When companies are on the "defensive", they can no longer be focused on leading...

    Hmmm - Could it be NetApp has taken the lead from EMC while they were dismissing and ignoring NetApp in the storage market? Or simply a fear of that happening?

    No matter where you are in this fight, you have to admit how much the landscape has changed in recent years! And in my estimation, NetApp wins this round now matter what happens with DD. Kudos to NetApp!

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Related Tickers

7/23/2009 4:00 PM
DDUP $33.52 Down +0.00 +0.00%
Data Domain, Inc. CAPS Rating: *
EMC $26.62 Down -0.08 -0.30%
EMC Corp CAPS Rating: *****
HPQ $31.93 Down -0.56 -1.72%
Hewlett-Packard Co… CAPS Rating: **
NTAP $35.87 Down -0.37 -1.02%
NetApp CAPS Rating: ***

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