NetApp increases bid to acquire Data Domain as EMC begins tender offer

By Lisa Kerner

Charlotte, N.C., June 3 - NetApp Inc. raised its offer for Data Domain Inc. to $30.00 per share in a cash-and-stock deal valued at $1.9 billion, it was announced on Wednesday.

In May, NetApp announced that it agreed to acquire Data Domain for $25 per share in a cash-and-stock deal valued at approximately $1.5 billion, net of Data Domain's cash.

The revised offer gives Data Domain stockholders the right to receive a cash amount of $16.45 plus shares of NetApp common stock equal to the exchange ratio for each Data Domain share.

NetApp said the exchange ratio is equal to:

• 0.7783 shares of NetApp common stock if the closing average as defined in the merger agreement is less than $17.41;

• 0.6370 shares of NetApp common stock if the closing average is greater than $21.27; or

• A fraction of a share of NetApp common stock equal to the quotient obtained by dividing $13.55 by the closing average if the closing average is less than or equal to $21.27 and greater than or equal to $17.41.

Data Domain's board of directors unanimously approved the revised agreement.

The transaction is expected to close in 60 to 110 days subject to customary closing conditions including regulatory approval.

EMC offer on table

EMC Corp. said its $30.00-per-share, all-cash offer for Data Domain is superior to NetApp's revised offer.

"We are proceeding with our superior cash tender offer, which is not subject to any financing or due diligence contingency," EMC chairman, president and chief executive officer Joe Tucci said in a company news release.

"We do not believe that the Data Domain stockholders will approve the merger transaction with NetApp," Tucci said.

EMC said it will fund the deal using existing cash balances.

On Tuesday, EMC began a tender offer for all outstanding Data Domain common stock. The offer will expire at midnight ET on June 29, unless extended.

EMC, located in Hopkinton, Mass., develops and supports information infrastructure technology and solutions.

Data Domain provides deduplication storage appliances for disk-based backup, archiving and network-based disaster recovery. The company is located in Santa Clara, Calif.

NetApp is a Sunnyvale, Calif.-based data storage company.

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