Cisco was urged yet again this week to raise its $3 billion bid for Tandberg. As IDG News Service's Steve Lawson reports, the company was addressed in an open letter urging a hike in the price:
Tandberg's long serving board chairman Jan Chr. Opsahl's believes that as a standalone company it could take Tandberg 10-15 years to move from a revenue level of USD 1bn to USD 10bn or about 5 years to achieve that same USD 10bn if it were part of Cisco. We see this as evidence to reflect a further mismatch between the offer price and the future growth profile.
The letter also takes issue with Cisco's claim of offering a 38.3% premium based on the Tandberg stock price of July 15. Tandberg claims it has been the subject of takeover speculation for 18 months, prompting periodic increases in its value during that time.
It also claims the Cisco price offers no premium based on Tandberg's historical trading valuation and vs. peers like Polycom, and its quarterly operational performance.
We believe that a higher, more appropriate price for the acquisition of Tandberg, taking into account its growth profile and the substantial scope for sales and cost synergies, is not in conflict with Cisco's respect of the principles of prudence and financial fairness.
Cisco has said it believes its offer is fair and that at a deal will eventually get done. But it also said it won't be shy about backing away if the price is not right.
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