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Cisco plays hardball over Tandberg buy

But snaffles Chinese TV box business in the meantime

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Cisco is warning shareholders of Tandberg - the video conferencing firm it is buying for $3bn - that it will not pursue the takeover at any price.

Last month some large shareholders made noises that Cisco's offer for the firm was too small - despite offering a 38 per cent premium.

Cisco issued a tough statement warning: "no acquisition should be pursued or completed if it runs counter to the broader principles of prudence and financial fairness."

The release notes that the deal offered a 38 per cent premium on Tandberg's share price and a 102 per cent return on the year.

Ned Hooper - corporate development VP at Cisco - said the deal was Cisco's first purchase of a European listed company. As such, the price reflected risks of currency movements and the complexity of integrating disparate engineering and sales teams.

Hooper added that the collaboration market was currently worth $34bn a year and was primarily based on voice. Cisco believes this will shift to video but will require serious investment and innovation.

In other news, Cisco has bought the set-top business of DVN, a big Chinese digital cable TV company. Cisco is paying $44.5m for the company - $17.5m immediately, and $27m over four years assuming sales targets are hit.

The Chinese government wants everyone on digital TV by 2015, so there is a big market for the winning box maker. Cisco's statement is here. ®

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