With the deadline approaching for closing Cisco’s USD 3
billion offer to acquire Tandberg, Cisco said it will consider
dropping its offer if Tandberg stockholders don't vote for the
takeover in significant numbers.
Cisco has extended its offer to 5:30 p.m. Nov. 18, at which time it
will announce whether at least 90 percent of Tandberg stock has
been tendered. Norwegian laws require at least 90 percent of
stockholders to approve acquisitions.
"Soon after expiration of the extended offer period," Cisco said in
a release, "Cisco will announce whether the 90 percent condition
for the offer has been met. If not, Cisco will evaluate whether or
not to withdraw the offer."
With Cisco making a big commitment to videoconferencing and
telepresence applications, Tandberg would represent an important
asset for Cisco's drive in the area. On the other hand, it believes
its USD 3 billion offer for Tandberg is fair and points to a recent
Ernst and Young analysis that found the offer was a fair deal for
Tandberg stockholders.
A group of Tandberg stockholders, representing about 24 percent of
the Norwegian firm's total shareholder population, has been holding
out for an 11 percent increase over the USD 3 billion figure. The
higher price would represent a 50 percent increase over Tandberg's
stock price when reports of a possible acquisition began
circulating.
Cisco CEO John Chambers has hailed an acquisition of Tandberg
because the two firms have similar cultures. Tandberg's chief
executive Fredrik Halvorsen has also supported the merger along
with the remainder of Tandberg's top management. The Ernst &
Young report was commissioned by Tandberg management.
Another problem for Cisco in agreeing to a higher bid is that the
acquisition-happy firm fears it could set a precedent for other
deals, which could become routinely challenged by stockholders
seeking additional money after a deal has been struck.