* Controls over 90 percent of Tandberg
* Bought 2 percent of shares in November
* To buy out remaining shareholders
* U.S. justice department makes second info request
(Adds fund manager interview, Norway tech sector details)
By Richard Solem
OSLO, Dec 4 Cisco Systems (CSCO.O) won control
over more than 90 percent of Norwegian target Tandberg TAA.OL,
allowing it to squeeze out remaining shareholders, and create
the world leader in videoconferencing equipment.
Cisco's original bid was rejected by over 90 percent of
Tandberg shareholders, forcing it to repeatedly extend its offer
deadline and raise its bid by 10 percent last month.
Portfolio manager Hogne Tyssoy at Holberg Funds was one who
first objected the deal, but has now accepted the 170 crowns per
"Cisco is one of a few companies internationally that can
take the company further to another level," Tyssoy said.
Tandberg is the leading videoconferencing equipment maker,
filling a gap between Cisco's high-end TelePresence conferencing
products and WebEx desktop video service. Tandberg holds 40
percent of the mid-tier market for videoconferencing, according
to Wainhouse Research.
While Cisco repeatedly threatened to walk away, most
analysts expected it to ensure the deal went through, since the
leading network equipment maker repeatedly touted
videoconferencing as a key growth business.
Cisco said on Friday it had 89.1 percent acceptance for its
19 billion Norwegian crowns ($3.38 billion) offer in addition to
2 percent of Tandberg, or 2.2 million shares, it bought in
"They have over 90 percent and can squeeze out the rest, so
this deal will happen," said analyst Andre Adolfsen at Nordea.
By 1348 GMT, shares in Tandberg were up 0.4 percent higher
at 163.8 crowns. Shares in Cisco were up 0.9 percent at $24.05
in premarket trading.
Cisco said on Friday it intends to respond expeditiously to
the U.S. Department of Justice (DOJ) request for additional
information about the deal, and to continue to work
cooperatively with the DOJ in connection with its review.
Analysts and traders said winning the regulatory approvals
for the deal should not cause any problems.
NORWEGIAN STORY - WHOSE NEXT?
"It is sad that we are losing also Tandberg, it's the latest
in a line of the leading, and somehow unique, Norwegian
technology companies that disappear," said Tyssoy of Holberg
Global heavyweights have bought up a number of Norwegian
technology firms in recent years, with Microsoft (MSFT.O) buying
Fast Search & Transfer, Nokia NOK1V.HE acquiring Trolltech and
Ericsson (ERICb.ST) taking over Tandberg Television.
"This is sad, and illustrates the challenges with a small
economy like the Norwegian, with one dominant and profitable
sector -- the oil sector. Building other business clusters is
challenging," Tyssoy said.
"We have had very few technology firms that have been given
the opportunity to become global leaders. Norway's good at
innovation and taking it to a certain stage, but without a big
business cluster, it is diffult to build something lasting."
Among the remaining Norwegian technology firms, mobile
browser maker Opera Software (OPERA.OL) and TV graphics firm
Vizrt RTZR.DE are seen as potential takeover candidates.
($1=5.621 Norwegian Crown)
(Reporting by Richard Solem; Writing by Tarmo Virki; Editing by
Dan Lalor and Simon Jessop)