What is this, the French Open? NetApp
Quick recap for those who blinked and missed it all: NetApp placed an offer for Data Domain at $25 per share in cash and stock, EMC said "Na-ah!" and started a $30 per share unsolicited tender offer. The ball was back in NetApp's court, and you just knew that the action was about to heat up.
And heat up it did. Now NetApp has matched EMC's $30 per share offer, albeit still with a combination of cash and stock versus the bigger boy's all-cash offer. EMC immediately told investors to just take the tender offer, and nudged Data Domain's board "to not take any actions that would further impede a transaction that is a superior alternative for Data Domain's shareholders."
But the board didn't listen and simply approved NetApp's new proposal. Data Domain CEO Frank Slootman said that this deal "will provide great value to our shareholders and customers."
So the ball is firmly back in EMC's court. The fact that Data Domain's stock now trades at $32.75 per share, a good 9% above the accepted offer price, tells me that shareholders are not particularly interested in EMC's original tender offer and are expecting a higher offer or two. Considering how fast this saga has played out so far, I wouldn't be surprised to see another move or two in the coming week.
Of course, if Data Domain's owners vote down any of these offers at the special shareholder meeting that seems impending, they may coax a higher value out of their holdings -- but should also remember the lessons learned from failed takeovers like Microsoft's
Take-Two now trades about 66% below EA's offer price, and Yahoo's owners could have taken the money and ran rather than sitting out a 45% fall (from the initial offer price).
And maybe those failures are the reason why everyone is moving so darn fast here. I think there'll be a firm deal by the time we crown the Wimbledon champ.
Take-Two Interactive Software is a Motley Fool Rule Breakers recommendation. Electronic Arts is a Motley Fool Stock Advisor pick. Microsoft is a Motley Fool Inside Value pick. Try any of our Foolish newsletters today, free for 30 days.
Fool contributor Anders Bylund owns shares in Take-Two Interactive (bought after the failed takeover but before the Great Panic of 2008), but he holds no other 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.