Network Computing is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

NetApp Increases Offer for Data Domain to $30 per Share

The bidding war for storage vendor Data Domain and its data deduplication technology picked up speed Wednesday when NetApp increased its bid to $30 per share, matching a bid made by EMC on Monday. NetApp said the new bid places a value of $1.9 billion on Data Domain.

Investors seemed to be expecting higher bids, boosting Data Domain's stock price to $31.40 in midday trading on Tuesday and pushing it to $32.65 in trading today before the market opened.

"Our strategic rationale remains the same and we firmly believe that the combination of our two companies will provide a greater opportunity and risk-adjusted value for Data Domain shareholders, customers, and partners," said Dan Warmenhoven, chairman and CEO of NetApp, in a statement. "The complementary nature of the Data Domain and NetApp product lines will result in higher aggregate growth compared to the redundancies that would result with the EMC product line."

NetApp on May 21 made a bid of $25 per share to acquire Data Domain to add its line of storage products and its highly valued data deduplication technology to its product portfolio. While some analysts said NetApp was over paying with its cash and stock offer, most thought it was a smart move to grab one of the faster growing storage vendors and its data reduction system, which helps IT departments shrink the amount of data they have to store and back up by eliminating redundant copies of files. That can also reduce the amount of storage companies have to buy, a big selling point during these tough economic times when most IT budgets are flat or shrinking.

EMC, the market leading storage company, responded this Monday with an all cash bid of $30 a share, setting off the bidding war. EMC, in arguing for its bid over NetApp's bid, said it could help grow sales of Data Domain's product line faster than could its rival.

  • 1