Cisco ups offer for Tandberg to $US3.4 billion

Stuart Corner
Tuesday, 17 November 2009 01:38

IT Industry - Deals

Cisco has upped the price of its bid for global video company Tandberg from $US3.0 billion to approximately $3.4 billion after failing to secure acceptances from more than 10 percent of shareholder when the, already extended, deadline of its initial bid expired on 16 November.

Cisco will also increase the interest payable on the offer price to a rate of 3.00 percent from 1.75 percent, but has warned that the new offer is its final one.

It says that shareholders representing more than 30 percent of the outstanding shares, including Tandberg's largest shareholders Folketrygdfondet and OppenheimerFunds, have pre-accepted the new offer giving Cisco a combined shareholder acceptance in excess of 40 percent. Cisco has extended the acceptance period until December 1, 2009.

The board of Tandberg had already unanimously recommended Cisco's initial offer, announced in late September but shareholders baulked at the price saying it was too low.

Cisco responded with a blog posting from chief strategy officer, Ned Hooper, who said "We strongly believe our offer is a very good price for Tandberg shareholders...[It] represents a 38.3 percent premium to the closing share price on July 15 - which is one day prior to major media reports of a possible transaction. The price also represents a 102 percent 12 month return for Tandberg shareholders, far surpassing global market index returns."