Cisco says it may drop Tandberg

There’s a good reason Cisco extended its $3 billion offer deadline for Tandberg another nine days: Less than 10% of shareholders accepted the deal.

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Cisco today said it may drop its offer for Tandberg if it fails to generate 90% shareholder acceptance by the new deadline of Nov. 18. Cisco has only received acceptance from 9.37% of Tandberg shareholders – far less than the 90% it needs to acquire the videoconferencing leader.

“Soon after expiration of the extended offer period on Wednesday, November 18, 2009, at 5:30 pm CET, Cisco will announce whether the 90 percent condition for the offer has been met. If not, Cisco will evaluate whether or not to withdraw the offer,” the company said in a statement.

Cisco yesterday extended the deadline for acceptance to Nov. 18. The deadline had been Nov. 9.

Cisco is facing resistance from groups of shareholders owning 30% of Tandberg. It also received an open letter from two of them claiming the $3 billion price undervalues the company.

Cisco has said it is confident a deal will get done, but it also said it does not intend to acquire the company if the price is not right. The company claims its offer represents a 38% premium on Tandberg.

Tandberg owns 40% of the videoconferencing market. Cisco covets its leadership position and midrange and desktop offerings, which could help Cisco fill bandwidth with video and drive sales of switches and routers to increase bandwidth capacity for video.

Cisco also views video as a vital component to address the $30 billion collaboration market.