Data Domain Reviewing EMC Bid, Suggests No Action On Tender

Data-storage company Data Domain Inc. (DDUP) said it is reviewing the bid to be acquired by EMC Corp. (EMC) and urged shareholders to take no action regarding the tender offer as the bidding war between EMC and NetApp Inc. (NTAP) is expected to continue.

The disclosure comes a day after Data Domain and NetApp announced a revised $2 billion bid for Data Domain, matching EMC's surprise $30 a share offer made Monday. NetApp is offering a combination of cash and stock, while EMC's bid is all cash.

Data Domain closed Wednesday at $32.53, showing investors believe the ultimate takeover price will be higher than the current offers.

NetApp last month agreed to acquire Data Domain for $25 a share to tap into the company's corporate presence. Data Domain specializes in technology for "deduplication," or avoiding repeated storage of the same data. The technology can reduce demand for storage devices, and it is a selling point at a time when corporate computer chiefs are trying to cut hardware costs and save floor space and electricity use in computer rooms.

While bidding wars have been scarce in the technology sector, Oracle Corp. (ORCL) recently outbid International Business Machines Corp. (IBM) for Sun Microsystems Inc. (JAVA). Analysts have said depressed prices for small companies and cash hoards at big companies may lead to more competitive deals in the sector.

-By Mike Barris, Dow Jones Newswires; 201-938-5658; [e-mail]