(Adds comments from NetApp and EMC, updates share prices.)
DOW JONES NEWSWIRES
Data Domain Inc.'s (DDUP) board urged shareholders to reject EMC
Corp.'s (EMC) $1.9 billion all-cash bid for Data Domain, while
affirming its support for a competing offer from rival data-storage
company NetApp Inc (NTAP).
EMC bid $30 a share for Data Domain two weeks ago, several weeks
after Data Domain agreed to NetApp's $1.5 billion cash-and-stock
bid. NetApp then boosted its bid to match EMC on a per-share
basis.
NetApp Chairman and Chief Executive Dan Warmenhoven said the
board's recommendation "reaffirms our belief that the NetApp
proposal provides attractive short- and long-term value to Data
Domain stockholders with no significant antitrust concerns and a
clearer and more timely path to close." He also said the
combination has a lower risk of business disruption, and that its
product lines are complementary and its corporate cultures are more
compatible.
EMC Chairman and Chief Executive Joe Tucci said its bid is
superior and offered price "certainty" and "protection as well as
the ability to close promptly." It noted that Data Domain had asked
NetApp to increase the cash portion of its offer.
Shares of Data Domain, which sells a technology used to reduce
the amount of duplicated information in data centers, were down
1.4% at $33.03 in recent trading, amid a broad market downturn.
Data Domain's board said Monday that if the company failed to
reject the EMC offer or reaffirm its approval of the NetApp deal,
it could lose NetApp's commitment and would have no assurance that
EMC would complete its offer. It also said it has been unable to
negotiate with EMC owing to its agreement with NetApp.
If Data Domain were to accept the EMC offer, it likely would
face a $57 million termination fee, the board added.
EMC shares recently were down 2.9% at $12.87 while NetApp shed
2.6% to $19.61.
-By Tess Stynes, Dow Jones Newswires; 201-938-2473;
tess.stynes@dowjones.com