Cisco Ups Tandberg Offer to $3.4 Billion

Vendor sets December 1 deadline for acceptance, says offer is final.

November 16, 2009

D.H. Kass

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Cisco Systems Inc. upped its offer for Tandberg to $3.4 billion in cash after shareholders for the video conferencing equipment maker said the initial bid was too low.

The networking giant extended the acceptance period for its offer until December 1 and said that if snubbed it will walk away from the deal and find other avenues to widen its position in the video conferencing market.

In a statement, Cisco said that the “revised offer remains consistent with the principles of prudence and financial fairness. If Cisco does not achieve the desired level of acceptances, the company will withdraw the offer and evaluate alternative ways to expand our activities in the video communications market.”

Tandberg’s board of directors unanimously recommended Cisco’s adjusted offer to shareholders.

“We believe this is an outstanding offer for our shareholders,” said Jan Chr. Opsahl, Tandberg chairman.

Fredrik Halvorsen, Tandberg chief executive, said that the revised offer “only further demonstrates Cisco’s belief in our technology and our people.”

Cisco said that the enhanced bid already has drawn acceptances from an additional 30 percent of Tandberg shareholders, including Folketrygdfondet and Oppenheimer Funds, its two largest shareholders, bringing to 40 percent the total of shareholders thus far affirming the deal.

Cisco’s offer requires the acceptance of 90 percent of Tandberg’s shareholders. The vendor initially bid $3 billion for all of Tandberg’s outstanding shares.

Tandberg shareholders that accepted Cisco’s earlier bid will be afforded the new price.

As of last week, less than 10 percent of Tandberg’s shareholders had accepted Cisco’s tender offer to buy the company.

In an open letter to Cisco dated November 6, shareholders represented by the investment firms Panta Capital and Scott & Associates AG complained that Cisco’s proposal undervalued Tandberg and suggested that the networking giant had erred in calculating the per share offer at a 38 percent premium.

But Dow Jones reported that the new offer has changed the mind of Peter Germonpre, managing director at Panta Capital, who said he would accept it.

TAGS: video,networking,IT,Cisco,Tandberg

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