Cisco works percentages toward Tandberg takeover
Just shy of 90 percent of Tandberg shares as it passes a self-imposed drop-dead deadline, Cisco says its acquisition plan is still very much alive.
In its quest to acquire Tandberg, Cisco is close...but no cigar yet.
The network giant has won 89 percent of the outstanding shares of Tandberg, a healthy amount, but still 1 percent short of the 90 percent needed under Norwegian law to close the deal. The company had issued a deadline of December 3 to capture the required shares or it said it would walk away.
But as of Friday, Cisco is giving every indication that it will forge ahead, citing tendered shares that would put it over the 90 percent mark.
Looking to capture the growing videoconferencing market, Cisco has been aggressive in its pursuit of Tandberg. Based in Oslo, Norway, and New York, Tandberg sells a range of low-cost and high-end videoconferencing tools and systems to companies large and small.
Afterfor Tandberg on October 1, a bid that received a thumbs down from the Norwegian company's shareholders, Cisco on November 16. Cisco said it still expects the deal to close in the first half of 2010.
In a press release issued Friday, Cisco confirmed that 99.8 million Tandberg shares had been tendered, representing 89.1 percent of all outstanding stock. It also said that additional shares, tendered on November 18 and 20, amount to an extra 2 percent, totaling 91.1 percent of all shares. Though Cisco may see that as a done deal, tendered shares essentially mean that it has gotten a promise to receive those remaining shares at a certain time--they're not in Cisco's pocket just yet.
Assuming Cisco scoops up the necessary shares to satsify Norwegian law, the company still faces regulatory approval from the U.S. Department of Justice. The company said Friday that it has received a Request for Additional Information, or a "second request," from the Justice Department on its purchase of Tandberg. This type of request is not uncommon among mergers of this scope. But it requires a prompt response from Cisco to present specific information to the government, which may be concerned about potential anti-competitive effects of the deal.
Cisco said it intends to respond expeditiously to the Justice Department's request and continue to work with the agency in connection with the agency's review.