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Print Edition StoriesTuesday, June 16, 2009
DataDomain recommends rejection of EMC buyout bid
By Mass High Tech staff
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The board of directors at data duplication software maker Data Domain Inc., the California-based company whose assets are at stake in a bidding war, has recommended that its stockholders reject a $1.8 billion buyout offer from Hopkinton-based EMC Corp., in favor of NetApp Inc.’s offer of $1.9 billion.
EMC (NYSE: EMC) had released a statement encouraging Data Domain to accept its bid because its all-cash offer of about $30 per share was a better deal than NetApp’s cash and stock offer, the company said.
In a press release from Data Domain, company president and CEO Frank Slootman said. “After careful review with our outside advisors, [our board] determined that the $30 per share EMC offer is not in the best interests of our stockholders at this time.” Among the terms leading to DataDomain’s recommendation are EMC’s reported inflexibility with negotiating terms of the agreement; the conditional nature of EMC’s offer; and the $57 million termination fee that Data Domain would have had to pay NetApps to break their agreement.
After EMC chairman, president and CEO Joseph Tucci sent a letter to Slootman expressing disappointment at not receiving early notice of a possible acquisition, the company then offered its own bid, 20 percent higher than NetApps’ original offer. EMC’s bid then prompted NetApps to increase its own offer to just surpass the amount of EMC’s bid.
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