Cisco’s $3 billion takeover of video conferencing company Tandberg is being thwarted by shareholders in the Norwegian company, who claim that the price is not high enough.
Cisco declared its intention to acquire the company on October 2, announcing that the Tandberg board had accepted the offer.
Under Norwegian law, Cisco needs 90% of shareholders to back the deal following a one-month tender period which started on October 9.
Shareholders challenging the deal include the Oslo Pension Fund and Rasmussen Group, who said on Thursday that they would not sell shares to Cisco under the current offer.
“On behalf of 21 shareholders representing above 24% of the outstanding shares in Tandberg, SEB Enskilda has... communicated to Cisco that these shareholders do not intend to tender their shares at the current offer terms,” brokerage SEB Enskilda told the FT.
The shareholders claim that Tandberg will generate strong returns as an independent company, although they have indicated that they are open to a higher offer from Cisco or a third party.
The investors have also raised questions in the Norwegian press over the decision of Tandberg’s management to recommend the offer.
Cisco has responded to the shareholder backlash stating, “we are aware of statements made by Tandberg shareholders and as we are currently in the middle of a tender offer process, we are not able to comment. We have stated previously that we believe we are paying a fair price for a quality asset.”
Cisco claims that the offer represents a 38.3% premium on Tandberg’s closing share price on July 15.
Under the original acquisition offer Cisco said it would retain Tandberg's Norway operations as a European center of video excellence, complementing its own video team in Belgium.
Tandberg's global workforce of 1,500 employees would also be kept. Tandberg's CEO Fredrik Halvorsen will head the new Telepresence Technology Group. He will report to Marthin De Beer, senior VP of Cisco's Emerging Technologies Group.