Bid, counterbid. Storage system provider NetApp Inc. (NASDAQ:NTAP)
has raised its bid for Data Domain Inc. (NASDAQ:DDUP) by $400 million to $1.9 billion, net of the target's cash, matching a
bid by storage giant EMC Corp. (NYSE:EMC).
NetApp first
offered $1.5 billion, or $25 per Data Domain share, on May 20. EMC came in with its spoiler bid on Monday.
So what might happen? The Deal Pipeline (subscription required) has some inisghts. It quotes a banker saying EMC has traditionally paid high
multiples for its M&A targets and predicting that if NetApp pursues Data Domain, it will likely lose -- though the fact that EMC's bid faces greater antitrust scrutiny is a wild-card. But for NetApp, getting EMC to pay a couple of hundred million more for the company is at least a consolation prize.
Data Domain provides a disk-based alternative to tape for data backup and archives. It achieved record sales growth in the past five years. Some see the original bid by Sunnyvale, Calif.'s NetApp as a defensive move since it could be an acquisition target because of depressed market prices. But NetApp says it brings to Data Domain a broader worldwide channel that will expand sales in Europe, the Middle East & Africa, Asia-Pacific and in enterprise accounts.
There's still the possibility of offers from other tech giants, such as IBM Corp. (NYSE:IBM). -
Baz HiralalNetApp revises Data Domain offer
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