Cisco Tries Again With Tandberg

Cisco Systems Inc. (Nasdaq: CSCO) is upping its bid for complink Tandberg ASA (OSE: TAA) to $3.4 billion, after getting stymied on its initial $3 billion bid.

The company announced the new bid, and a deadline extension to Dec. 1 for the offer, this morning. (See Cisco Increases Tandberg Bid.)

It sounds as if this is a final offer, though. "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," the company states in its press release.

At least this time, it's got more support. Cisco's gotten the company's largest shareholders -- Folketrygdfondet and OppenheimerFunds -- to agree to go along with the new price. Those two, combined with other shareholders and the 9.37 percent of shares that would have voted for the $3 billion price, put about 40 percent of Tandberg's shares on Cisco's side.

To seal the deal, Cisco needs approval from shareholders representing 90 percent of Tandberg's shares. A bloc representing 24 percent of shares decried the original $3 billion bid shortly after it was made on Oct. 1. (See Cisco Bets $3B on Tandberg , Not So Fast, Cisco, Cisco Extends Tandberg Offer, and Cisco Sweats Over Tandberg.)

The new bid could have an interesting side effect. It's well known that Cisco is on another of its acquisition rampages. (See Cisco to Buy Starent for $2.9B.) Now, it's possible companies will get the message that they can squeeze Cisco for a little extra cash or stock, writes analyst Mark Sue of RBC Capital Markets in a note published today.

"It was an international tender offer and most of Cisco's cash is overseas so maybe Cisco can argue it's a one-time event," Sue writes.

— Craig Matsutrygdfondet, West Coast Editor, Light Reading

steclark2380 12/5/2012 | 3:52:25 PM
re: Cisco Tries Again With Tandberg This is a smart move for Cisco as they continue to pursue a dominance in the video world.
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