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These guys would be better off with a clean break-up. "Let's just be friends" is just too awkward for everybody involved.
EMC's (NYSE: EMC ) tender offer for storage efficiency expert Data Domain (Nasdaq: DDUP ) was set to expire today, so the company filed an extension until July 10. Data Domain will hold its annual shareholders' meeting in the meantime. And none of it matters.
As of last Friday, with an already-extended deadline looming large, only 0.28% of Data Duplication's shares had been tendered to EMC's offer. That's tantamount to a vote of "no confidence" in the deal.
To put that tiny number into perspective, consider that Electronic Arts (Nasdaq: ERTS ) at one point had support from about 15% of the Take-Two Interactive (Nasdaq: TTWO ) shares in its efforts to take over the smaller video game production house. Nice, but not enough -- that merger never happened. And that was with just about 50 times the shareholder support EMC's current offer is enjoying.
Put another way, it looks like Data Domain's owners prefer to see the competing NetApp (Nasdaq: NTAP ) offer coming to fruition. That's also what I expect to happen in the end -- Data Domain sets a date for a shareholder vote, gets the approval, and then becomes a very important part of NetApp's hopes and plans for the future.
EMC would have to cough up more cash to win this battle. Even then, EMC might have to resort to downright hostilities if it really wants Data Domain, similar to the acrimonious proxy fight brewing in Broadcom's (Nasdaq: BRCM ) buyout proposal to Emulex (NYSE: ELX ) . That's just not a healthy way to get hitched, unless you want to start planning the divorce party already.