Cisco Gains More Than 90 Percent of Tandberg
Cisco Systems now has enough shares of Tandberg stock under its control to force the sale of the Norwegian company.
Cisco officials announced Dec. 3 that investors who held 89 percent of Tandberg stock had approved the deal, a number that was less than the desired 90 percent under the $3.4 billion offer.
However, on Dec. 4, Cisco said that it had bought about 2.2 million shares of Tandberg stock on the open market, bringing the total amount of shares under its control to over 91 percent. Under Norwegian law, meeting the 90 percent threshold allows Cisco to automatically buy the remaining shares from those stockholders who are holding out.
The move brings resolution to a deal that analysts said made sense when it was announced Oct. 1. At the time, Cisco said it was offering $3 billion for Tandberg, which makes video conferencing and telepresence equipment.
Cisco also sells such products, but aimed at high-end enterprises. Analysts said the deal made sense for Cisco because it would bring Tandberg's SMB products into the fold.
However, not many Tandberg shareholders were thrilled with the Cisco offer, saying it was too low and opting instead to keep it independent unless a better offer came through from Cisco or a third party.
Cisco last month raised the bid to $3.4 billion, and twice extended the deadline for meeting the 90 percent threshold.
Now Cisco can move forward with the purchase, which officials said they expect will close in the first half of 2010.
In a video speech, Tandberg CEO Fredrik Halvorsen said the combination of his company with Cisco will push forward the video conferencing and collaboration market.
"We will deliver more innovation into this space than either one of us could have done on their own," Halvorsn said.
The result will be a revolution in the work environmetn, he said.
"What used to be called 'the new way of working' will be called 'the new normal,'" Halvorsen said.
Even though Cisco has control of more than 90 percent of Tandberg stock, there still will be other hurdles to clear. On Dec. 3, Cisco officials said they were asked for information regarding the Tandberg deal from the Department of Justice, which is investigating whether any antitrust issues will result from the deal. The officials said they will respond quickly to the request.