• A delayed EC review process of the current proposed acquisition, which may end in a rejection left unchallenged by Oracle
• A renegotiated deal with Oracle, which would likely exclude MySQL and therefore involve a renegotiated deal price
• An offer by IBM (IBM) to buy Sun at a discount to the Oracle offer following a rejection by the EC of the current Oracle deal
• A scrapping of the deal by Oracle

Interestingly, Reid feels this last possibility isn’t as disastrous as it might sound. Sun has $1.8 billion in cash, and while its latest results weren’t at all pretty, they did feature improving gross margins.

“Our current thesis on [Sun] assumes the announced [Oracle] acquisition will close, but risks have increased,” Reid wrote. “There remains a risk that the European Commission will provide a ’statement of objections’ to [Oracle’s] planned acquisition of [Sun] based on concerns regarding [Oracle’s] plans for the MySQL database which [Sun] currently owns. The deadline for such a decision is January 19, 2010 but it is possible that the EC will state objections before the end of the year.”

Elaborating, Reid notes that “Although [Oracle] could likely reduce the risk of a statement of objection–and thus of a delayed or perhaps failed bid for [Sun]–by supplying to the EC an argument to explain why the [Oracle-Sun] deal will not adversely impact competition in the database market, our assumptions around [Sun’s] valuation include increased risk regarding the completion of the [Oracle-Sun] transaction at $9.50….While we believe the currently proposed acquisition by [Oracle] is the most likely outcome for [Sun], we believe other scenarios remain possible, although each is made more difficult by the continued uncertainty around Sun’s fate, and the resulting erosion in customer confidence in Sun.”

Sources tell Bloomberg that Cisco (CSCO) has little intention of meeting the demands of a group of investors who would like it to reach a bit deeper into its wallet before they hand over their 24 percent stake in Tandberg, the world’s second largest manufacturer of videoconferencing kit. Cisco would rather walk away than sweeten a bid that represents a 38.3 percent premium on Tandberg’s closing share price on the day before news of a possible acquisition broke.

Or that’s what Cisco wants them to think, anyway. Because scrapping what is a pretty strategic deal for the company would be silly at this point given Cisco’s huge cash reserves. Rumors that it would “strongly consider walking away” from Tandberg are likely more gamesmanship than anything else.

“I think it’s quite unlikely that they’ll drop their offer, everything points to them buying Tandberg,” Arctic Securities analyst Martin Hoff told Bloomberg. “It’s probably smart of them to send some signals to scare the shareholders into accepting the offer.”

For one thing, Palm (PALM) is waiving its $99 app submission fee for open-source webOS apps. For another, it’s giving developers the option of selling their apps through the App Catalog or via a Web-based storefront.

The first option entails a $50-per-app fee and requires review and approval by Palm. This includes the chance to bid on priority placement in the App Catalog if developers wish. The second option requires neither fee nor review and allows developers to distribute their apps over the Web with Palm handling transactions and fulfillment–assuming the apps conform to Palm’s content and user interface criteria.

“By opening up a web distribution channel free from our review, we are placing a great deal of trust in you–the developer–and the community,” Palm said on its blog. “We want you to embrace these principles, establish a high bar of quality and user experience, and help enforce these rules.”

An interesting strategy–assuming developers do establish the high bar of quality to which the company refers. Certainly, it’s very different from Apple’s (AAPL) approach, which includes an application-approval process criticized as obtuse and byzantine. By offering developers the chance to pay to promote their software in its Apps Catalog or to distribute it via the Web without having to suffer through an approval process, Palm is positioning its program as the polar opposite of Apple’s. Question is, are these enticements enough to win their attention?

Nortel Networks has rejected Research In Motion’s bid for the wireless infrastructure assets Nortel is unloading as part of bankruptcy proceedings. RIM said Monday night that it intended to offer $1.1 billion for Nortel’s CDMA and LTE businesses, but was told it could do so only if it agreed not to bid on other Nortel assets, something it had intended to do.

In a blistering statement, RIM (RIMM) accused Nortel (NT) of imposing unfair conditions on the court-supervised auction of its assets and of jeopardizing their continued Canadian ownership.

“RIM is extremely disappointed that Nortel’s world leading technology, the development of which has been funded in part by Canadian taxpayers, seems destined to leave Canada,” said co-CEO Jim Balsillie. “RIM remains extremely interested in acquiring Nortel assets through a Canadian ownership solution that would serve the dual purpose of keeping key wireless technologies in Canada and extending RIM’s leadership in the research, development and distribution of leading edge wireless solutions, but RIM has found itself blocked at every turn.”

Why? Nortel says RIM was late to the game and hasn’t followed proper auction procedure.

“Other parties moved expeditiously to comply with the court approved procedures to become a qualified bidder,” the company said in a statement. “It was not until July 15, 2009, that RIM submitted a letter to Nortel asking to be a qualified bidder and since that time, Nortel has diligently attempted to work with RIM on acceptable confidentiality terms relating to Nortel’s valuable intellectual property assets, but RIM refused to comply with the court approved procedures.”

What’s really going on here? It’s hard to say, though clearly there’s more to the story. After all, RIM’s $1.1 billion bid is far, far more than Nokia Siemens’s stalking horse bid of $650 million. And what does RIM want with the CDMA business, anyway?

Which is exactly what Data Domain did.

One consolation: NetApp (NTAP) may have failed as a suitor, but it received a $57 million breakup fee from Data Domain (DDUP) as a result of the termination of the agreement.

Still, it’s a tough blow for NetApp (NTAP), which will now focus on “existing growth opportunities” instead of ill-starred bidding wars with rivals.

Said Dan Warmenhoven, NetApp’s chairman and CEO: “While NetApp’s acquisition of Data Domain would have produced benefits for customers and employees and complemented NetApp’s existing growth trajectory, we remain highly confident in our already compelling strategic plan, market opportunities, and competitive strengths.”

“NetApp applies a disciplined approach to acquisitions, one focused intently on creating long-term value for our stockholders.” Warmerhoven added. “We therefore cannot justify engaging in an increasingly expensive and dilutive bidding war that would diminish the deal’s strategic and financial benefits. NetApp has established leadership positions in virtualized infrastructure, storage efficiency, and unified storage, even in these difficult economic times, by helping customers meet their business objectives with less physical storage while reducing costs. That commitment will not change. We look forward to continuing to build on our foundation of innovation and customer service, and to continuing to execute our successful growth strategy.”

[Image credit: despair.com]

This morning, EMC raised its offer for Data Domain to $2.1 billion from $1.8 billion, an 11 percent increase over its previous all-cash bid. Data Domain’s board had previously recommended that shareholders reject EMC’s $30-a-share cash bid in favor of a $30 cash-and-stock offer from NetApp (NTAP).

Hard to see the board doing so again now that the EMC (EMC) has sweetened the financial end of its proposal and removed some deal-protection provisions with which Data Domain (DDUP) had taken issue. With those gone, EMC’s bid is clearly superior to NetApp’s, CEO Joe Tucci claims, and it would be hard to argue otherwise.

“Over the past several weeks we’ve received strong support from many Data Domain stockholders and customers, validating our belief that EMC is Data Domain’s best choice,” Tucci wrote in a letter to Data Domain’s leadership. “With regulatory requirements now fulfilled, and in light of the clearly superior proposal we submitted to Data Domain’s Board of Directors today, we expect Data Domain to sign our definitive agreement that will deliver superior value in cash to the Data Domain stockholders in as little as two weeks.”

Data Domain has until midnight on July 17 to accept the offer.

UPDATE: NetApp responded to EMC’s announcement with the following statement:

“In response to EMC’s revised, unsolicited offer, the NetApp Board of Directors will carefully weigh its options, keeping in mind both its fiduciary duty to its stockholders and its disciplined acquisition strategy. We will provide an update shortly.”

On Monday the company once again said its bid for the data storage equipment maker Data Domain is “superior” to a competing offer from NetApp. This, despite the fact that Data Domain earlier in the day issued a statement recommending that shareholders reject EMC’s $30-a-share cash bid and instead accept a $30 cash-and-stock offer from NetApp.

“Our Board is committed to enhancing stockholder value and, after careful review with our outside advisors, determined that the $30 per share EMC Offer is not in the best interests of our stockholders at this time,” said Frank Slootman, president and CEO of Data Domain.

Why not? Well, among other things Data Domain hasn’t been able to discuss EMC’s offer because EMC hasn’t yet accepted the confidentiality and standstill agreement that would allow it to do so. For another, Data Domain must pay a $57 million termination fee if it should abandon its deal with NetApp–and that’s on top of a host of other considerable transaction expenses.

That’s understandable, I suppose. Still, it’s difficult to see why Data Domain insists that EMC’s all-cash offer is worth less than NetApp’s cash-and-paper bid. Unless it’s doing so to force EMC’s hand deeper into its wallet. And, indeed, that may be exactly what’s happening here. Sources say. EMC (EMC) could raise its offer to as much as $35 per share to win Data Domain (DDUP) or force NetApp (NTAP) to pay more than it can afford for it. “EMC is in the win-win box and NetApp is in the lose-lose box,” a source close to the company told Reuters. “EMC can pay more than NetApp can in a reasonable range. If NetApp wants to pay at an unreasonable range, that’s good for EMC.”

Continuing, Folino accuses Broadcom of engineering its bid to commandeer new contracts that Emulex recently won at the expense of its rivals–including Broadcom.

“Your unsolicited proposal is opportunistic given Broadcom is uniquely aware of the new unannounced design wins that Emulex has secured with tier-one OEMs at the expense of Broadcom and other competitors,” Folino writes. “As you know, these design wins are kept confidential at our customers’ request and do not typically begin contributing revenue for several quarters. Thus, Emulex’s stock price does not fully reflect the long-term value creation potential that the Company has already secured. However, given that some of these design wins have come at your expense, including your core Ethernet networking business, you are uniquely aware of the future value we have secured and how well positioned we are to unseat you on many other platforms in the near future. We believe your proposal is an opportunistic attempt to capture that value, which rightly belongs to our stockholders.”

In other words, quit low-balling us–especially if, as you profess, you’d like to move ahead with a deal in a “friendly, collaborative manner.”

Yahoo, for its part, is said to be skeptical of a deal that would essentially dismember it, but people close to the company tell the Journal that Yahoo is still open to discussing any proposal from Microsoft. Perhaps even one that would see the software giant acquire Yahoo for $33 to $34 a share. After all, this is exactly the deal Yahoo proposed to Microsoft on May 17–two weeks after the company officially dropped its bid for Yahoo. That’s right, Yahoo CEO Jerry Yang and Co.–after insisting Microsoft’s offer “substantially undervalued” the company, tried to resuscitate a deal after Microsoft CEO Steve Ballmer scrapped the bid. From the Journal:

[On] May 17, two weeks after Microsoft officially dropped its pursuit of Yahoo … Yahoo CEO Jerry Yang, director Ron Burkle and chairman Mr. Bostock met with Microsoft’s Mr. Ballmer. Messrs. Bostock and Burkle told Mr. Ballmer they were prepared to sell Yahoo for $33 to $34 a share, the price range Microsoft had offered before talks broke down, according to people familiar with the meeting. That would have valued the deal at about $47 billion, or $6 billion less than Yahoo’s previous asking price of $37 a share.”