Updated with Cisco statement and share price
London-based Panta Capital, and Zurich-based Scott & Associates, which are advising a small group of Tandberg shareholders, are calling on Cisco to increase its bid. In an open letter to Cisco management posted on the Panta Capital Web site, the investment consulting firms said that the offer of 153.5 Norwegian Krone ($26.9) a share is woefully inadequate.
"In this specific case your offer does not reflect the true value of Tandberg's business prospects nor does your offer reflect the premium to market value that you claim it does," they wrote. "We believe the NOK 153.5 per share offer undervalues the significant growth profile of Tandberg."The letter, which was released Friday, comes just a few days after a blog posting from Ned Hooper, senior vice president for corporate business development at Cisco, which reiterated the firm's commitment to the original bid. "We strongly believe our offer is a very good price for Tandberg shareholders," he said, following recent media speculation about the deal price. "Cisco's offer represents a 38.3% premium to the closing share price on July 15, which is one day prior to media reports of a possible transaction." The price also represents a 102% 12-month return for Tandberg shareholders, he added. Panta Capital and Scott & Associates, however, have questioned Cisco's decision to pick Jul. 15. as a reference date, explaining that this was months before the networking firm's actual offer. "Between the 15th of July and the 1st of October, the Oslo Benchmark Index appreciated 27% in $ terms while Tandberg's main competitor Polycom (PLCM - Get Report) also saw its shares rise 23%, neither of which are a reflection of your offer," they wrote.