Cisco warns it might abandon bid for Tandberg

Stuart Corner
Tuesday, 03 November 2009 03:22

IT Industry - Deals

Hooper added "The collaboration market is a $34 billion dollar opportunity where voice is currently the largest application. We believe that video will become the core of the collaboration market, but, it will require substantial innovation and investment to drive this market transition. We've already seen increased competition for the traditional video players in the market, as broad based collaboration vendors increasingly focus on video."

A Reuters reported today, 3 November, said that a consultant's report commissioned by Tandberg in line with Norwegian practice - had rated the bid as fair, but the Reuters report added: "Such consultancy reports often do not hold much sway with investors, instead being potentially more significant as courtroom ammunition if takeovers end up in a legal battle."

Meanwhile Breakingviews - which claims to be " the world's leading source of agenda-setting financial insight" - has questioned Cisco's long established practice of making acquisitions. Breakingviews was reported by the New York Times saying that the twin pillars of Cisco's strategy - acquisitions ($US22b since 2002) and share buybacks ($US60b since 2002) have failed to deliver any return to shareholders. Nor, it says, have they received any dividends: something that CEO John Chambers has promised to deliver before he retires.