Cisco Lands Tandberg, at Last

Following an uncomfortable struggle with a stubborn set of Tandberg ASA (OSE: TAA) shareholders, Cisco Systems Inc. (Nasdaq: CSCO) announced Friday morning it "has now received acceptances for or purchased shares representing more than 90% of the shares" in the Norwegian conferencing systems vendor, and that it will proceed with its $3.4 billion acquisition.

The IP giant says it received acceptance representing 89.1 percent of Tandberg's shares, and acquired 2 percent of the stock during November, giving it a 91.1 percent holding. It now intends to make a compulsory purchase of the remaining stock, in line with Norwegian rules, and apply for a delisting of Tandberg shares from the Oslo Stock Exchange.

Cisco also said it has received a "Request for Additional Information from the United States Department of Justice (DOJ)" regarding the acquisition. The request is "part of the regulatory process," to which the company will "respond expeditiously."

Cisco has found Tandberg's shareholders tough nuts to crack. Its original offer valued Tandberg at $3 billion, but that was accepted by shareholders representing less than 10 percent of the stock. (See Cisco Sweats Over Tandberg and Tandberg Deal Boosts Cisco's Video Plans.)

Even once Cisco raised its offer by about 11 percent, to $3.4 billion, a hardcore group of Tandberg investors held out, forcing Cisco to extend its offer. (See Cisco Tries Again With Tandberg and Cisco Extends Tandberg Offer.)

Now, though, Cisco can start planning the integration of Tandberg's extensive range of videoconferencing (including telepresence) products that complements Cisco's high-end TelePresence system, which has gained some traction with carriers. (See Tandberg Lets Telepresence Run Free, Bharti Airtel Teams With Cisco, Telstra Offers TelePresence, and Telepresence Gets Three-Carrier Demo.)

Tandberg, which is profitable and growing, and generated more than $630 million in revenues during the first nine months of 2009, is the market leader in the overall videoconferencing market, with about 40 percent of a market expected by Gartner Inc. to be worth about $2.1 billion market in 2009. (See Tandberg Reports Q3 and Tandberg Posts Q2.)

Tandberg's main challenger in the videoconferencing sector is Polycom Inc. (Nasdaq: PLCM), which commands about 30 percent of the global market. Polycom, though, cites research for the first half of 2009 that makes it the market leader (35 percent to Tandberg's 31 percent) in terms of units shipped.

— Ray Le Maistre, International News Editor, Light Reading

Pete Baldwin 12/5/2012 | 3:51:41 PM
re: Cisco Lands Tandberg, at Last

They're going to say a lot about this at next week's Cisco analyst meeting aren't they?  Got to stick to that 12-17% growth figure...

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