In the fight to own Data Domain, EMC hopes that raising its offer to $2.1 billion, or $33.50 per share, will tear the de-duplication company from the arms of storage rival NetApp. Offering over $200 million more could persuade Data Domain’s shareholders, who were perhaps unswayed by EMC’s earlier proposal of an all-cash deal that matched NetApp’s $30 cash-and-stock offer, to support an EMC agreement instead of the board-approved NetApp acquisition offer. Both companies are after Data Domain’s de-duplication technology, which helps reduce the amount of data that needs to be stored by only backing up new information in storage.
With the far bigger war chest, EMC has the cash to make NetApp give up its prize, or at least force Data Domain’s management to fight several shareholder lawsuits if it does manage to stay with NetApp. NetApp said earlier this afternoon that it would provide an update on its deal shortly. According to Dan Warmenhoven, chairman and CEO of NetApp:
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.
It doesn’t sound like NetApp’s willing to keep paying in order to play.