In a move to meet the demand of some TANDBERG stockholders, Cisco Systems, the world’s largest maker of computer networking gear, has upped its bid for video conferencing gear maker TANDBERG by about $400 million.
Cisco (News - Alert) has raised its offer for TANDBERG to $3.4 billion. Company officials said today the latest bid is the firm's final offer. Officials said the revised offer “remains consistent with the principles of prudence and financial fairness,” in a statement. If Cisco doesn’t achieve the desired level of acceptance representing 90 percent shares, the firm said it would withdraw the offer and consider other ways to expand its activities in the video communications market.
TANDBERG has until Dec. 1 to accept the new offer, according to Cisco.
So far, more than 40 percent of Tandberg's (News - Alert) stockholders, including investment firm OppenheimerFunds and Norwegian government pension fund Folketrygdfondet, have pre-accepted the new offer, Cisco said.
And Already, TANDBERG officials have offered their support of the proposed deal.
We believe this is an outstanding offer for our shareholders,” said Jan Chr. Opsahl, chairman of TANDBERG, said in a statement. “The TANDBERG Board of Directors unanimously recommends this offer to shareholders.”
This revised offer only further demonstrates Cisco’s belief in our technology and our people,” Fredrik Halvorsen, CEO, TANDBERG, said. “We continue to believe that Cisco and TANDBERG share a vision of changing the way people communicate and collaborate, and that the combination of world-class technologies, Cisco’s global scale, and exceptional people from both organizations will enable us to accelerate innovation and market adoption.”
The revised bid comes a month after Cisco announced it intended to buy TANDBERG, a Norway-based company, for about $3 billion. Cisco initial bid received weak support from many Tandberg's shareholders, who felt the $3 billion offer undervalued the company, CNET news reported.
With the acquisition, Cisco said it wants to integrate TANDBERG’s video endpoints and network infrastructure solution into its collaboration architecture, allowing intercompany and multi-vendor interoperability across its product portfolio. Cisco officials said the acquisition would help strengthen the company’s position in the $34 million collaboration market and expand its presence as a player in the videoconferencing sector.
TANDBERG, which operates joint headquarters in Oslo, Norway, and New York, offers telepresence, high-definition videoconferencing and mobile video products and services. The company designs, develops and markets systems and software for video, voice and data communication. The firm has 1,500 employees worldwide
Cisco, which mainly sells routers and switches to corporate firms, has diversified its operations in recent years with acquisitions to enter new markets. Over the last 25 years, the company has bought 130 businesses, including cable set-top boxes and home wireless routers. In 2007, Cisco bought 11 firms, while it completed five acquisitions in 2008, company officials said.
With such a merger, video conferencing providers such as Polycom would encounter a more challenging playing field, industry officials told TMCnet.
Amy Tierney is a Web editor for TMCnet, covering business communications Her areas of focus include conferencing, SIP, Fax over IP, unified communications and telepresence. Amy also writes about education and healthcare technology, overseeing production of e-Newsletters on those topics as well as communications solutions and UC. To read more of Amy's articles, please visit her columnist page.
Edited by Amy Tierney