There’s a good reason Cisco Systems Inc. extended its US$3 billion offer deadline for Tandberg SA another nine days: Less than 10 per cent of shareholders accepted the deal.
The companies agreed Oct. 1 to merge, meaning Cisco would acquire Tandberg shares and keep Fredrik Halvorsen, currently Tandberg’s chief executives officer, in the company. The boards of directors of both companies approved the acquisition but this does not mean Tandberg’s shareholders want it.
“Soon after expiration of the extended offer period on Wednesday, November 18, 2009, at 5:30 pm CET, 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,” Cisco said in a statement.
Cisco yesterday extended the deadline for acceptance to Nov. 18. The deadline had been Nov. 9.
Cisco is facing resistance from groups of shareholders owning 30 per cent of Tandberg. It also received an open letter from two of them claiming the $3 billion price undervalues the company.
Cisco has said it is confident a deal will get done, but it also said it does not intend to acquire the company if the price is not right. The company claims its offer represents a 38 per cent premium on Tandberg.
Tandberg owns 40 per cent of the videoconferencing market. Cisco covets its leadership position and midrange and desktop offerings, which could help Cisco fill bandwidth with video and drive sales of switches and routers to increase bandwidth capacity for video.
Cisco also views video as a vital component to address the $30 billion collaboration market. The company introduced its Telepresence products three years ago and this week announced WebEx Mail, IP phones with video screens and other collaboration products.
When it announced the deal to acquire Tandberg, Cisco said it wanted to make its own video products work better with those from other manufacturers.