Updated with Cisco statement and share price

SAN JOSE, Calif. ( TheStreet) -- Cisco ( CSCO) is coming under increasing pressure to up the ante in its $3 billion bid for Norwegian videoconferencing specialist Tandberg.

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) also saw its shares rise 23%, neither of which are a reflection of your offer," they wrote.

Peter Germonpre, Panta Capital's managing director, told Reuters that a fair bid price would be at least 170 Norwegian krone ($29.9).

This is not the first time that Cisco's Tandberg bid has been challenged. Last month the Financial Times reported that some 24% of Tandberg shareholders do not intend to tender their shares, but would be open to a higher bid from Cisco or another company.

Cisco CEO John Chambers has been making a song and dance about video for years, although his firm's efforts have been largely centered on the high end of the market. Tandberg would extend this reach downstream. The Norwegian firm enjoyed sales of $808 million last year, and is seen as the 800-pound gorilla in video conferencing.

With companies like Hewlett-Packard ( HPQ), Apple ( AAPL), Microsoft ( MSFT ) and Huawei, all ramping up their video conferencing strategies, few observers were surprised by Cisco's Tandberg bid.

Already approved by the Tandberg board, the networking giant had hoped to get regulatory approval for the Tandberg deal by the first half of next year.

With cash and investments of $35.4 billion exiting its recent first quarter, Cisco can certainly afford to increase its Tandberg bid. The initial deal was seen as boosting sales of the company's core networking products, and also forced down shares of Tandberg rivals Polycom and Radvision ( RVSN).

Polycom has itself been touted as a potential acquisition target, with Avaya mentioned as a possible suitor.

Cisco has been on an M&A tear in recent months, throwing down $2.9 billion to acquire Starent ( STAR) and spending $183 million to buy ScanSafe.

In a statement emailed to TheStreet, Cisco said that Tandberg's shareholders are getting a good deal.

"We believe we are paying a fair price for a quality asset, and our offer comes recommended by the Tandberg Board of Directors," it said. "As noted in Tandberg's communications to the Oslo Exchange, Cisco's offer represents a 38.3% premium to the closing share price on July 15 - which is one day prior to major media reports of a possible transaction."

"Further, Cisco's general approach to M&A activities is that no acquisition should be pursued or completed if it runs counter to the broader principles of prudence and financial fairness."

Cisco shares fell 18 cents, or 0.75%, to $23.75, Friday, despite a modest rally in tech stocks that saw the Nasdaq rise 0.18%.

-- Reported by James Rogers in New York