Cisco has extended the deadline for its $3 billion offer for Tandberg, but is woefully lacking shareholder approval
Cisco has extended the deadline for its takeover offer of video conferencing company Tandberg, the majority of whose shareholders remain unconvinced about the $3 billion (£1.8 billion) offer.
Cisco had set an initial deadline for shareholders to accept the deal of 9 November, but has now pushed that deadline to 18 November.
Cisco is looking to get 90 percent of Tandberg shares before moving forward with the deal. But in a brief statement, Cisco said that it had only received acceptances from investors representing 9.37 percent of Tandberg shares.
In the statement, Cisco officials said they will decide soon after the 18 November deadline passes whether they had gotten the 90 percent of shares they are looking for. If not, they will decide whether to withdraw the offer.
Cisco announced the $3 billion offer on 1 October, and the Tandberg board of directors is supporting it. The deal would give Cisco a greater share of the video conferencing market, which company officials say is a key part of the $34 billion (£21 billion) opportunity in the overall collaboration market.
However, over the past few weeks, a number of firms representing almost 30 percent of Tandberg shares have said they will not accept the bid, saying it is too low. They would rather see the Norwegian company stay independent, or for Cisco or another company to up the offer.
In an open letter to Cisco on 6 November, Panta Capital and Scott & Associates chided Cisco for asking too low a price for Tandberg and for ignoring the stock price increases for both Tandberg and rival Polycom in the months leading up to Cisco’s bid, and for not taking into account Tandberg’s operational successes.
Cisco for its part has called the offer fair, and during a meeting with analysts and reporters following his company’s quarter financial release on 4 November, CEO John Chambers said he was confident the deal would get done, but also said he was confident Cisco would do well in the market even without Tandberg.
Analysts have said that if Tandberg shareholders reject the $3 billion bid, Cisco will have little choice but to raise the offer.