Cisco's Tandberg Bid Under Threat From Unhappy Owners
By Gustav Sandstrom, Of DOW JONES NEWSWIRES
STOCKHOLM -(Dow Jones)- Minority owners in Tandberg ASA (TAA.OS) Friday said
Cisco Systems Inc's (CSCO) recommended bid for the Norwegian video-conferencing-
equipment maker is at least 11% too low and should be raised if it is to be
accepted.
In an open letter ahead of the offer period expiration on Nov. 9, investment
firm Panta Capital and advisory firm Scott & Associates AG said Cisco's current
153.50 Norwegian kroner per share offer doesn't adequately reflect Tandberg's
operational performance or the valuation of its peers.
An acceptable bid price would be at least NOK170 a share, Panta Capital's
managing director Peter Germonpre told Dow Jones Newswires.
However, Cisco press spokesman Tim Burt told Dow Jones Newswires Friday that
his company considers the current bid premium to be "full and fair."
He said Cisco hasn't yet decided whether it will extend the offer period and
walking away from the Tandberg bid could be an option.
Cisco will disclose its decision after reviewing the level of acceptance on
Nov. 9, said Burt. He said the 90% acceptance aimed for by Cisco is "a demanding
threshold" and the company doesn't yet know how many Tandberg owners may accept
the current bid.
Cisco and Tandberg on Oct. 1 announced the recommended bid offer, which values
the Norwegian company at around 17.2 billion Norwegian kroner ($3.03 billion).
The offer represents an 11% premium to Tandberg's share price Sept. 30, and a
38% premium to the price on July 15 before reports emerged about an coming bid.
Peter Germonpre said Friday Panta Capital and Scott & Associates each
represent less than 1% of the total shares in Tandberg, but that he has spoken
to other Tandberg shareholders who "have the same issues and concerns" about the
bid.
"I think the acceptance is going to be pretty low," he said.
Swedish brokerage SEB Enskilda Oct. 15 said owners of 24% of Tandberg's
shares, which it represented, had rejected Cisco's bid claiming that the premium
was too low.
Panta Capital and Scott & Associates aren't among the owners represented by
SEB Enskilda, Germonpre said Friday.
Tandberg press spokesman Geir Olsen declined to comment regarding the ongoing
bid process.
Cisco has pushed into 30 new business areas, including video-conferencing
systems, which it says could each produce $1 billion a year in revenue. The move
into "telepresence" reinforces the Silicon Valley-based networking-equipment
company's rivalry with Hewlett-Packard Co. (HPQ), which also sells video-
conferencing gear and has stepped up its investment in networking equipment.
Cisco this week posted a 19% profit drop and a 13% revenue decline for its
fiscal first quarter, but Chief Executive John Chambers issued his most forceful
comments yet that the economy was improving and that businesses were ready to
resume spending on technology.
In recent weeks, Cisco has backed up its optimistic view by spending more than
$6 billion on four acquisitions, including its offer for Tandberg.
At 1207 GMT, shares in Tandberg traded up 0.6% at NOK152, against a 0.5% rise
in the wider Olso market.
Company Web site: www.tandberg.com
-By Gustav Sandstrom, Dow Jones Newswires; +46-8-5451-3099; gustav.sandstrom@
dowjones.com
(Ben Worthen in San Francisco contributed to this article.)
(END) Dow Jones Newswires
11-06-090725ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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