Cisco Raises Bid For Tandberg To $3.4 Billion

NEW YORK (AP) — Cisco Systems Inc. said Monday it raised its bid for Norway's Tandberg ASA, the world's largest provider of videoconferencing equipment for business users, after only a fraction of Tandberg shareholders agreed to Cisco's initial offer.

Cisco increased its bid to 170 kroner ($30.46) per share from its earlier offer of 153.5 kroner, valuing Tandberg at $3.4 billion. The previous offer was worth $3 billion.

The Norwegian company's board approved the original deal, but as the offer period approached its Wednesday deadline, shareholders had offered up less than 10 percent of Tandberg shares. Shareholders now have until Dec. 1 to accept.

Cisco said 40 percent of Tandberg's shareholders backed the new offer, including its largest minority shareholders — Folketrygdfondet, Norway's domestic pension fund, and OppenheimerFunds.

The new bid represents Cisco's "final price," it said, adding that if it doesn't get enough acceptances, it will withdraw its bid altogether.

UBS analyst Nikos Theodosopoulos said the raised bid was unexpected and sets a bad precedent for future deals. The raised bid may encourage shareholders of future acquisition targets to hold out as well.