DDI still prefers NetApp

(By Philip Carnelley – Tuesday 16th June 2009 9:00 am). Further to our reports on the tussle between storage vendors EMC and NetApp to acquire Data Domain (NetApp ups the ante for Data Domain), yesterday DDI, which has twice recommended offers from NetApp to its shareholders, rejected EMC’s offer of $30 per share. EMC’s bid is equivalent to NetApp’s cash-and-shares offer, but is all cash.

NetApp – whose stock fell slightly yesterday – doesn’t have such deep pockets as EMC, which is showing considerable determination. In an unusual move, EMC sent an open letter to DDI employees last week to tell them how much they’d like being part of the EMC family. It is generally agreed that EMC has done a good job with the prior VMware acquisition, though we’d argue that it has done less well with another big purchase, Documentum. Nonetheless, DDI is “home turf” for EMC.

Wall Street is clearly expecting a counterbid– DDI shares are now selling at $33, up 10% on EMC’s offer. Looks like NetApp and DDI will have to think again if they don't want to EMC to land the company.