DOW JONES NEWSWIRES
NetApp Inc. (NTAP) declined to offer a higher bid to acquire
Data Domain Inc. (DDUP), terminating its merger agreement and
allowing EMC Corp. (EMC) to swoop in with its superior $2.2 billion
bid.
Data Domain said it entered into a definitive merger agreement
with EMC, which will acquire the company for $33.50 a share in
cash. Data Domain's board of directors unanimously approved the
decision, as it also recommended that Data Domain stockholders
tender their shares to EMC.
Following the news, NetApp's shares were up 4.3% to $19.18 in
after-hours trading, while Data Domain's shares fell 1.4% to $33.42
and EMC's shares were up 0.6% to $12.60.
Many expected EMC to eventually acquire Data Domain because it
has a larger war chest than NetApp. On Monday, EMC raised its offer
for Data Domain by 11% to $2.2 billion, up from last month's bid of
$30 a share. EMC's bid is all cash, while NetApp had offered $30 a
share in a combination of cash and stock.
As a result of the broken deal, NetApp said it received a $57
million break-up fee from Data Domain. Data Domain also said it
would cancel its special meeting of stockholders scheduled next
month to discuss the NetApp merger.
"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," said NetApp Chairman and Chief Executive
Dan Warmenhoven.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com