Cisco has raised its bid for the acquisition of videoconferencing company Tandberg by around 11% to $3.4 billion, in the face of shareholder resistance to the initial offer.
But Cisco has warned that its revised offer is final, and that it will walk away from the table if it does not receive an acceptance level of around 90%.
Investors holding around 90% of Tandberg had failed to accept the offer at the initial price, with some publicly vocalizing their beliefs that the bid undervalued Tandberg.
But the new offer already has pre-acceptance from shareholders holding more than 30% of Tandberg – including its two largest shareholders, Folketrygdfondet and OppenheimerFunds – bringing the total acceptance to 40% so far.
Cisco has extended the acceptance period until December 1 as a result of the revised offer. Tandberg's board had already advised shareholders accept Cisco's initial offer.
BusinessWeeksaid the revised bid has been calculated to entice shareholders to accept, while at the same time sending a message that Cisco will not panic and overbid for acquisition targets whose shareholders hold out for more money.
Cisco CEO John Chambers needs to get this deal done, it notes. “He has said that video is his number one strategic priority, and video-conferencing in particular is a great opportunity for Cisco. Few, if any, forms of traffic chew up bandwidth and require more sophisticated routing and switching than videoconferencing.”