Following the
extension Monday of its $3 billion offer for Tandberg ASA, Cisco Systems Inc. (NASDAQ:CSCO) Tuesday
reported that it has garnered only 9.37% of the video teleconferencing company's shares.
It certainly isn't unusual for a target's shareholders to hold off with backing a deal until they get a clearer sense of whether it will succeed, or whether a buyer will raise its bid. The outcome of this deal, which requires the backing of holders with at least 90% of the target's shares, was thrown into doubt Oct. 15 when
Swedish brokerage SEB Enskilda AS said a group with a 24% holding in Tandberg would not
support the deal. On Nov. 6, a group of minority shareholders also came
out in opposition to the transaction, saying the bid was at least 11%
too low.
Cisco nevertheless has its work cut out for it. Some analysts are predicting that Cisco could raise its offer to appease Tandberg shareholders, but others have argued that the company doesn't want to set a precedent of getting pushed around on price.
For its part, Cisco said it will announce whether it has met the 90% share requirement soon after the offer expires on Nov. 18.
"If not, Cisco will evaluate whether or not to withdraw the offer," the company said in a statement. - Olaf de Senerpont Domis
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