EMC's Cash Could Open Door to Data Domain

Updated from 8 a.m. EDT

The tug of love for Data Domain(DDUP Quote) is continuing, with rival suitors EMC(EMC Quote) and NetApp(NTAP Quote) still locked in a battle to win hearts and minds. Money, however, could prove the deciding factor in who wins the storage specialist.

NetApp recently claimed victory in the race to acquire Data Domain, clinching a $30-per-share cash-and-stock deal with the Data Domain board, but try telling that to EMC. The storage giant is still pushing its own $30 all-cash bid, targeting stockholders and even Data Domain's own staff in an attempt to derail the deal.

EMC CEO Joe Tucci, for example, recently launched a charm offensive aimed at Data Domain employees, part of a broader campaign to win over shareholders.

With neither EMC nor NetApp showing any sign of letting go, it seems inevitable that Data Domain's $1.9 billion price tag will grow.

Data Domain's board urged the company's shareholders to reject EMC's offer Monday and vote in favor of the merger with NetApp, although there is growing speculation that cash-rich EMC may simply up the ante.

"In our view, the final 'nail in the coffin' will likely be EMC raising its all-cash bid to $33 to $35 [per share] in the near-term," wrote Brian Marshall, an analyst at Broadpoint AmTech, in a note released Tuesday. "At this level, we believe NetApp will not be able to continue and will have to settle for the $57 million break-up fee."

There has been a lot of talk about how the "laid back" culture of Data Domain could be at odds with that of storage behemoth EMC, although money could be the decisive factor in this deal.