Cisco Systems
SEB ABs SEB Enskilda unit in Norway canvassed shareholders and found that 21 owners wont sell “at the current offer terms,” according to a statement issued today by the bank. SEB was acting on behalf of clients, said Nils Kasper Lodden, the banks spokesman.
Cisco, the worlds largest maker of networking equipment, offered 153.50 kroner a share for Tandberg on Oct. 1 to expand in videoconferencing. The offer needs support from 90 percent of Tandbergs shareholders. The Norwegian companys board has recommended shareholders to accept the offer.
“Its highly likely Cisco will sweeten the bid,” Jason Ader, an analyst with William Blair & Co., said in an interview from Boston. “If they raise the bid by 10 percent, it would be $300 million more — and thats a rounding error for Cisco.”
Cisco had $35 billion in cash at the end of July. Ciscos offer was 11 percent more than Tandbergs closing price on Sept. 30. The bid is also a 38 percent premium to the closing price on July 15, prior to news reports of a possible transaction, the San Jose, California-based company said in a statement.
Sweeter Bid?
“Its possible that Cisco sweetens the bid,” said Michiel Plakman, who helps oversee the equivalent of $150 billion at Rotterdam-based Robeco NV, including Cisco and Tandberg shares. “I still expect it to happen. I can see why some of the larger shareholders would say, well we want actually slightly more.”
Tandberg rose 2.7 kroner, or 1.8 percent, to 155.3 kroner in Oslo. Cisco fell 13 cents to $24.25 in Nasdaq Stock Market trading.
Cisco said in its e-mailed statement its paying a “fair price” and that it wont comment further during the tender process. The tender period started on Oct. 9 and will end on Nov. 9.
This month, Cisco also announced plans to buy Starent Networks Corp. for $2.9 billion, or $35 a share. That was a 21 percent more than the companys share price the day before. With Starent, Cisco will gain equipment phone carriers use to transmit video and other multimedia data to mobile devices.
Starent warranted a higher premium because it delivered better year-over-year revenue growth than Tandberg, said Catherine Trebnick, a Boston-based analyst with Avian Securities LLC. In 2008, Starents sales increased by 74 percent while sales at Tandberg advanced 28 percent.
Tandbergs Geir Olsen didnt return phone calls seeking a comment. Plakman at Robeco declined to say whether the manager is one of the shareholders involved.