Data Domain board rejects EMC's $1.8B offer, recommends NetApp merger
- 16 June, 2009 07:03
Data Domain's board is asking stockholders to reject EMC's unsolicited offer to purchase the company, and instead approve a merger with NetApp.
EMC and NetApp have been fighting a bidding war over the de-duplication and backup vendor throughout June, with EMC offering US$1.8 billion, all in cash; and NetApp offering US$1.9 billion of cash and stock.
NetApp and Data Domain had agreed to an acquisition when EMC joined the fray, leading to an escalation in price. In the latest round, Data Domain Monday announced that its board of directors sent a recommendation to Data Domain stockholders that they reject EMC's offer.
"Our Board is committed to enhancing stockholder value and, after careful review with our outside advisers, determined that the $30 per share EMC offer is not in the best interests of our stockholders at this time," Data Domain CEO Frank Slootman says in a press release. "We are pleased with the revised terms of NetApp's acquisition offer and feel it will provide great value to our shareholders and customers."
Data Domain faulted EMC for not engaging in direct negotiation, and attaching conditions that would allow EMC to terminate its offer at any time. Data Domain also said that it would have to pay NetApp a $57 million termination fee if it agrees to a merger with EMC and terminates the merger agreement with NetApp.
Despite the setback, EMC on Monday reiterated its all-cash offer to purchase Data Domain, and predicted that Data Domain's stockholders will not approve the merger with NetApp.