EMC, NetApp war for Data Domain could drag on

By Anupreeta Das

NEW YORK (Reuters) - The bidding war over storage company Data Domain Inc (DDUP.O) could drag on for weeks until antitrust regulators review competing offers from EMC Corp (EMC.N) and NetApp Inc (NTAP.O) for red flags.

Although No. 1 corporate data storage equipment maker EMC says it is confident it will get the regulatory green light, people familiar with the matter said the company may raise its offer if antitrust concerns appear to make a tie-up with NetApp more preferable to Data Domain shareholders.

Data Domain, whose technology helps companies reduce the amount of storage space they need to back up data, has agreed to be acquired by EMC's smaller rival, NetApp, for $1.9 billion, or $30 a share.

NetApp initially agreed last month to pay $1.5 billion, or $25 a share, for Data Domain, before EMC stepped in with a $30-a-share offer that compelled NetApp to raise its bid.

Data Domain shareholders are yet to vote on NetApp's offer, and EMC's tender offer expires June 29.

But if Data Domain's stock price is any indication, investors expect a higher bid. Shares of Data Domain have hovered above $32 since EMC made its unsolicited offer.

Whether that higher bid comes could depend on the outcome of the regulatory review, which is currently under way.

"My initial reaction was that, certainly, EMC is going to get a second request" for information, said John Briggs, who co-heads the antitrust practice at Axinn Veltrop & Harkrider LLP and is not involved in the deal.