The stakes have been raised yet again in the ongoing saga to acquire storage vendor Data Domain.
EMC announced Monday that it has upped its bid for Data Domain to $33.50 per share in cash, a deal worth about $2.1 billion. The company said its all-cash offer is "clearly superior" to NetApp's proposal of $30 per share in cash and stock.
In a letter to Data Domain Chairman Aneel Bhusri, EMC further strengthened its claim by stating that it has removed all deal-protection provisions from the offer as a way of maximizing value for Data Domain stockholders. The company urged the Data Domain board to do the same.
"It was questionable agreeing to deal protections in your initial agreement with NetApp when you knew of our interest in acquiring the company," EMC CEO Joe Tucci said in his letter to Bhusri. "There is no basis for continuing with them now."
Unlike NetApp, EMC's proposal isn't subject to any financing, due diligence, or regulatory contingencies. EMC will use existing cash to pay for the transaction.
EMC also said it's ready to close the deal within two weeks--almost a month sooner than NetApp. The $33.50-per-share offers expires at midnight EDT on July 17.
"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 said in a statement. "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."
The skirmish to take over Data Domain has been playing out since May 20 with NetApp's original offer of $25 a share.
In early June, EMC jumped in and started a bidding war. In mid-June, two lawsuits were filed against Data Domain over its apparent reluctance to consider EMC's offer.
Speculation has also run rampant as to why EMC and NetApp are duking it out to win the hand of Data Domain.
The corporate soap opera between Data Domain and potential suitors NetApp and EMC has a new episode.
Two law firms have launched class action suits against the board of Data Domain, alleging that the process used to accept NetApp's offer may not have been fair and open.
Attorneys at Bernstein Litowitz Berger & Grossmann filed suit in Delaware on June 12 on behalf of the Police and Fire Retirement System of the city of Detroit and "similarly situated shareholders of Data Domain," according to the firm's press release.
The suit contends that Data Domain's board breached its responsibility to shareholders by refusing to negotiate with EMC and for agreeing to sell Data Domain to NetApp without taking steps to maximize the price paid to Data Domain's shareholders.
"Data Domain's board of directors violated their fiduciary duties by approving the original and the restructured deals with NetApp, both of which give NetApp an improper bidding advantage in the form of a termination fee, a no-shop/no-talk provision and matching rights," said the Bernstein Litowitz Berger & Grossmann law firm in a statement. "The board granted each of these deal protections before any value-maximizing process took place, in a blatant effort to ensure that their favored merger partner is Data Domain's ultimate acquirer."
The firm has asked the court to issue an injunction preventing Data Domain and NetApp from consummating their merger.
Separately, law firm Levi & Korsinsky filed its own suit in California last week against Data Domain's board, with similar allegations.
"Under the terms of the proposal, Data Domain's shareholders would receive $30 to be paid in a combination of cash and NetApp stock," said Levi & Korsinsky in a statement. "In addition, NetApp offered positions on its board to certain Data Domain officers and there are rumors that the Data Domain CEO Slootman could be the next CEO of NetApp. This raises questions as to whether the sales process conducted by the board was fair and open."
A spokesperson at Data Domain contacted by CNET News said the company had no comment on the lawsuits.
The battle for Data Domain started on May 20 when NetApp offered $25 a share to acquire the company. On June 1, EMC jumped in with a $30-per-share bid. NetApp then countered with a similar offer. Since then, the market has speculated on why Data Domain is in such hot demand, causing these financial fireworks.
This was originally posted on ZDNet's Between the Lines.
EMC swooped in Monday with a $1.8 billion, or $30 a share, offer for Data Domain.
The rub: rival NetApp already had a plan to buy the Santa Clara, Calif.-based company for $1.5 billion, or $25 a share.
EMC said its all-cash offer is a 20 percent premium over NetApp's stock-and-cash offer on May 20.
Simply put, EMC wants to acquire Data Domain in order to thwart NetApp's offer--or at the very least make the acquisition more expensive. Joe Tucci, EMC's chief executive, said his company's offer is a "superior proposal" and a "win-win."
He added that the acquisition will strengthen EMC's position in the "next-generation disk-based backup and archive market."
Data Domain offers "deduplication storage appliances for disk-based backup, archiving, and network-based disaster recovery," according to its profile on Yahoo Finance.
On a conference call, Tucci said the Data Domain offer is about driving growth. "We had our eye on Data Domain, but obviously someone got there first," he said. He added that the growth profile of the combined companies makes the higher price worth it and that the combination of three products--EMC's DL4000 and Avamar and Data Domain--will be a $1 billion business.
Certainly, Data Domain shareholders were happy about the EMC offer:
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