EMC (NYSE:EMC) is playing for keeps after all. The storage giant has increased its open-market bid for Data Domain (NASDAQ:DDUP) and changed a few deal conditions. But will that be enough to keep Data Domain from running into NetApp's (NASDAQ:NTAP) open arms?

The next few days will tell the tale. EMC's new offer is materially more tempting than the old one, kicking the all-cash consideration up from $30 per share to $33.50 per share. Under those terms, Data Domain's enterprise value works out to about $2.1 billion, and EMC will pay straight out of its coffers, which are bulging with more than $7.2 billion in liquid assets.

Remember how Data Domain balked at EMC's last offer because NetApp's proposal seemed like more of a sure thing? Well, EMC has removed many of the restrictions that gave Data Domain cold feet, such as the termination fee and other terms that seemed to protect EMC's interests more than Data Domain's.

Both EMC and NetApp just received FTC clearance for their proposals, meaning that the government sees no antitrust issues with either deal. The SEC has also given Data Duplication approval to run a shareholder vote on NetApp's merger missive. EMC still thinks it can beat NetApp to the altar with "a faster time to completion by almost a month than under the NetApp proposal."

The whole saga should be settled by mid-August. I see three possible outcomes, listed here in order of probability:

  1. NetApp scrambles up more cash by hook or by crook and acquires Data Domain for more than EMC is willing to pay.
  2. EMC ends up coughing up $2.5 billion or more to keep Data Domain out of the competition's hands.
  3. Neither suitor matches the high hopes of Data Domain's shareholders, and everything is voted down. Remember Electronic Arts (NASDAQ:ERTS) bid to acquire Take-Two Interactive (NASDAQ:TTWO) last year that ultimately failed?

Data Domain's shares trade for about $34.10 as of this writing -- nearly 2% above EMC's raised and strengthened bid. And it's staying there on some of the heaviest trading volume seen since the NetApp-versus-EMC tug of war started about a month ago. This tells me that Data Domain investors are interested, but still holding out hope for a continued battle and higher bids.

I think they're right. NetApp needs Data Domain's storage efficiency products, which could become a make-or-break ingredient in NetApp's customer negotiations -- and in the company's ambitions to become a storage powerhouse of EMC's caliber. In other words, NetApp can't afford to let Data Domain walk away without a fight.

Additional acquisitive Foolishness:

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Fool contributor Anders Bylund owns shares in Take-Two, 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.