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Cisco thinks twice on Norwegian video borg

$3 billion walk away?

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Cisco may walk away from its $3 billion offer to buy Norwegian video conferencing specialist Tandberg amidst resistance from a block of shareholders.

A report from Bloomberg on Friday cites "a person familiar with the transaction" saying that Cisco may deep-six the corporate assimilation rather than upping its initial offer.

Swedish brokerage SEB Enskilda, which represents 24 per cent of shares in Tandberg, rejected the offer earlier this month in hopes Cisco may lay more kronor on the table. Terms of the deal require Cisco to get at least 90 per cent of shares on their side for approval.

The shareholders said they believe Tandberg will do better as an independent company — but are willing to reevaluate their outlook if Cisco would sweeten the pot.

Tanberg posted third-quarter operating income of $50m on sales of $234.7m this October.

Cisco wants to add Tandberg products to its existing video conference kit sold under the TelePresence brand. Boss John Chambers waxed at the deal's announcement that the two firms have similar cultures and a "shared vision" of the future of business communications.

Despite supposed resistance to heaping more money unto Tandberg, some analysts quoted in the Bloomberg piece are skeptical that its not simply a negotiating tactic on Cisco's part. They think the networking giant is too sweet on moving further into the video conferencing market to actually turn their nose up at a bigger payout. ®

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Latest Comments

Hello Cisco, Goodbye Tandberg Norway.

As a former Tandberg employee, and one who likes the company, I hope the deal doesn't go through. It would almost definitely mean closing shop in Norway within two years. This is logic, not fear mongering. Cisco already has already developed their own endpoints which for the most part are much nicer and cooler than their Tandberg counterparts. Cisco used to just OEM the Tandberg T150, but they designed phones that look and feel better than Tandbergs now.

Tandberg has conference room systems, but they're obscenely expensive, and while full of cool features, their sales volume is low and Cisco can almost definitely do a better job on their own or they can move the hardware guys from Norway to the states to do it.

The real item of interest to Cisco is the backbone hardware which Tandberg makes. But Tandberg wasn't making anything interesting a while back, so they acquired a British company full of great talent and products that ... also make cool end point systems, cooler than Tandberg Norway's. So in reality, all the products of interest to Cisco are made by the office formally known as Codian. If Cisco paid all that money for just Codian, it would be worth every penny.

Fact is, while Tandberg Norway makes a few interesting end points, they're not that interesting compared to what Codian and Cisco make. The good new of course is that if Tandberg in Norway closes shop, there will be about 350 good to excellent engineers back in the Norwegian market for companies like Trolltech, Opera and others to pick and choose from.

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fools!

fools! sell your shares now to Cisco for that price - otherwise your company and tech will be worth pretty much nothing in a couple of years as an alternative becomes the norm.

'sweeten the deal' = greed. granted, they might have hoped for bigger returns - even in a global downturn...but the asking price for their current market value is on par.

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Of course it's important.

Tandberg is THE name in videoconferencing.

(If something isn't branded Tandberg, customers will almost always ask if it works with Tandberg equipment... )

@AC; which Tandberg products did you try?

I don't know much about their Set-top/desktop/personal kit, but the big videoconference systems, like the new HD series are marvellous.

(We have 'a few' of these systems in my organisation, so I have a lot of experience with them. )

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