So Much for NetApp’s Data Domain Acquisition
by John Paczkowski
Posted on June 2, 2009 at 4:00 AM PT
Data Domain shareholders are celebrating today. After market close Monday, EMC (EMC) made a $1.8 billion bid for the backup and disaster data recovery systems company, trumping the $1.5 billion NetApp (NTAP) offered for it in late May.
The bid values Data Domain (DDUP) at $30 a share–a 20 percent premium over NetApp’s rival proposal which itself represented nearly a 40 percent premium over Data Domain’s closing stock price of $17.91 on the day the bid was announced. Obviously, great news for anyone with Data Domain in their portfolio.
During a conference call, EMC CEO Joe Tucci called the company’s all-cash proposal “superior” to NetApp’s offer and “a win-win” for both companies. “We didn’t just wake up one day and say maybe this is a good thing to do,” he said. “We have had our eye on Data Domain and obviously somebody moved before we did.”
And while that somebody might have signed a binding agreement with Data Domain, it hasn’t yet won shareholder approval. Nor is it likely to. What investors in their right mind would argue for $25 per share in cash and stock over $30 in cash, especially when the latter really requires no due diligence?
Incidentally, shares in Data Domain are up more than 18 percent at $31.21 this morning.
