Cisco says it offered 'very good price' for Tandberg

Cisco's bid of 153.5 Norwegian kroner a share, or about $3 billion, is a 38.3 percent premium over Tandberg's stock price on July 15, when speculation first emerged that the company would be acquired, said Ned Hooper, Cisco's chief strategy officer, who oversees Cisco's acquisition efforts.

“We have also been required to consider currency exchange costs which, at the current rates, have added at least $100 million to our overall expenses,” Hooper said today in a posting on the company's corporate blog. A weakening U.S. dollar is making the deal more expensive for Cisco, which will pay shareholders in kroner.

Cisco, based in San Jose, California, agreed on Oct. 1 to acquire Tandberg to expand its line of videoconferencing products. The deal may be in jeopardy after some Tandberg stockholders, who together own 24 percent of the company, pressed for a higher bid last month. By Norwegian law, 90 percent of Tandberg's investors must approve the deal. Cisco may abandon its offer if it doesn't receive enough votes, a person familiar with the transaction said last week.

'Fair' Premium

“Is a 38.3 percent premium fair for Tandberg shareholders? Absolutely,” Hooper said on the blog. “Does it also fairly reflect risks borne exclusively by Cisco shareholders? Yes.”

The price also more than doubles the return for Tandberg shareholders over the past 12 months, he said.

Earlier today, accounting firm Ernst & Young described Cisco's bid as “fair from a financial point of view, so far as the shareholders of Tandberg are concerned,” according to a statement released by the Oslo Stock Exchange. The Oslo exchange approved Ernst & Young as an independent third party to evaluate the offer, according to the statement.

Cisco advanced 19 cents to $23 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have gained 41 percent this year. Tandberg, based in Lysaker, Norway, declined 1.4 percent to 151.5 kroner in Oslo trading.

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