Feeds

Data Domain sued over NetApp takeover

Shareholders cry for EMC

High performance access to file storage

Data Domain chose NetApp's takeover bid over EMC, and now dissident shareholders are crying dirty dealing.

Two law firms have launched separate class-action lawsuits against Data Domain's board of directors, saying the bidding process wasn't fair and open.

On Monday, Data Domain rejected a hostile takeover offer from storage giant, EMC, which asked shareholders to back a $30-per-share acquisition. Data Domain's board instead opted for a similar $30-per-share offer from NetApp, to be paid in both cash and stock.

The law firm Levi & Korsinsky has now filed a class-action lawsuit in California, accusing Data Domain's board of unfairly choosing NetApp because it offered cushy executive jobs.

"NetApp offered positions on its board to certain Data Domain officers and there are rumors that Data Domain CEO [Frank] Slootman could be the next CEO of NetApp," the law firm said in a statement. "This raises questions as to whether the sales process conducted by the Board was fair and open."

Meanwhile, attorneys at Bernstein Litowitz Berger & Grossmann on behalf of stock holders from the Police and Fire Retirement System of the city of Detroit accuse Data Domain of giving NetApp an "improper bidding advantage."

The lawsuit filed in Delaware claims NetApp slapped on a "no shop/no talk" provision, matching rights, and a $57m termination fee that prevented that company from talking to EMC or others interested in acquiring the company.

"They agreed to the NetAp merger without following even the most basic process for informing themselves of the best available transaction," the lawsuit claims. It seeks an injunction preventing Data Domain and NetApp from closing the deal.

Shareholder lawsuits are fairly common in major acquisitions, but this one does have a bit of a twist. Data Domain management might not like the idea of selling to EMC, but it's hard to refute (from a shareholder position) that a cash deal is better than a cash-and-stock bid of the same value. ®

High performance access to file storage

More from The Register

next story
This time it's 'Personal': new Office 365 sub covers just two devices
Redmond also brings Office into Google's back yard
European Court of Justice rips up Data Retention Directive
Rules 'interfering' measure to be 'invalid'
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Cisco reps flog Whiptail's Invicta arrays against EMC and Pure
Storage reseller report reveals who's selling what
Bored with trading oil and gold? Why not flog some CLOUD servers?
Chicago Mercantile Exchange plans cloud spot exchange
Just what could be inside Dropbox's new 'Home For Life'?
Biz apps, messaging, photos, email, more storage – sorry, did you think there would be cake?
IT bods: How long does it take YOU to train up on new tech?
I'll leave my arrays to do the hard work, if you don't mind
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
HP ArcSight ESM solution helps Finansbank
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.