Data Domain Takes EMC's Higher Bid

Cash is king after all as Data Domain ( DDUP) agreed to EMC's hostile $2.1 billion takeover offer.

EMC's revised $33.50 a share all-cash proposal Monday was the winning bid, causing NetApp and Data Domain to tear up their merger agreement Wednesday.

NetApp collected its $57 million breakup fee after surrendering to EMC by deciding not to raise its previous $30 a share offer.

"NetApp applies a disciplined approach to acquisitions, one focused intently on creating long-term value for our stockholders," CEO Dan Warmenhoven said in a press release Wednesday. "We therefore cannot justify engaging in an increasingly expensive and dilutive bidding war."

On Monday, as widely expected EMC played hardball with its smaller rival NetApp by raising its cash bid from $30 to $33.50, putting the deal's value at $2.1 billion for Data Domain and its shareholders.

Data Domain's board had agreed to a $1.9 billion cash and stock deal with NetApp last month, citing the good cultural fit between the two companies. This followed a $1.9 billion cash bid from EMC, which in turn surpassed NetApp's original offer of $1.5 billion in cash and stock.

Data Domain shares, which had surged to $34 earlier this week on news of EMC's higher bid, was down 46 cents to $33.44 in afterhours trading Wednesday.

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