UPDATE: Cisco Extends Deadline To Tandberg Shareholders
(Updates with additional background, comment from Cisco)
By Roger Cheng
Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- Cisco Systems Inc. (CSCO), unable to sway all of
Tandberg ASA's (TAA.OS) shareholders with its $3.03 billion offer for the video
conferencing company, on Monday extended the deadline in an effort to lure the
remaining hold-outs seeking a richer bid.
The San Jose networking titan has maintained that it is offering a "full and
fair" price for Tandberg, based in Norway. But a minority group of Tandberg
shareholders have complained the price is too low. Cisco's deal values Tandberg
at 153.50 Norwegian kroner per share; Tandberg shareholder Panta Capital told
Dow Jones Newswires last week that an acceptable bid price would be at least
NOK170.
The offer period, which was expected to expire Monday, was extended to Nov.
18. All terms and conditions remain in place, according to Cisco. The company
wanted to buy up all of the shares, but had a 90% "threshold" that likely wasn't
met.
In early October, Cisco offered to buy the video-conferencing-equipment maker
in a deal that values the company at around 17.2 billion Norwegian kroner ($3.08
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
upcoming bid. Tandberg's board and management also support the deal.
But investment firm Panta Capital and advisory firm Scott & Associates AG said
in an open letter that the current offer doesn't adequately reflect Tandberg's
operational performance or the valuation of its peers.
Last week, Cisco reported its fiscal first-quarter profit dropped 19% as lower
sales offset improved margins, and the company noted strong sequential trends
and that the economic outlook has improved. Against a backdrop of greater merger
activity, Cisco also agreed to acquire Starent Networks Corp. (STAR) last month.
Cisco Chief Executive John Chambers reiterated to analysts that the offer was
fair, and noted that he would be willing to walk away from any deals if the
price was no longer attractive.
"Cisco's general approach to M&A activities is that no acquisition should be
pursued or completed if it runs counter to the broader principles of prudence
and financial fairness," a Cisco spokeswoman said Monday.
Tandberg plays into the company's burgeoning video conferencing business,
which is one of the 30 new business areas that Chambers most often talks about.
The company has been acquiring businesses to augment those new ventures.
Earlier Monday, Cisco said it as offering a three-part bond deal worth at
least $1 billion, which it intends to use for general corporate purposes. The
company has $10.3 billion in long-term debt as of July, according to a filing
with the Securities and Exchange Commission.
Cisco shares fell 0.1% to $23.80.
-By Roger Cheng, Dow Jones Newswires; 212-416-2153; roger.cheng@dowjones.com
(Gustav Sandstrom, Romy Varghese, Prabha Natarajan, and John Kell contributed
to this report.)
(END) Dow Jones Newswires
11-09-091239ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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