OSLO/NEW YORK (Reuters) - Over 90 percent of shareholders in Norwegian videoconferencing company Tandberg TAA.OL snubbed an acquisition bid by U.S. network equipment maker Cisco Systems Inc (CSCO.O), with many expecting a sweetened offer.
Cisco revealed the tally of responses from Tandberg shareholders on Tuesday, showing only 9.37 percent acceptance, a day after announcing it would extend its 17.2-billion-Norwegian-crown ($3.1 billion) offer to November 18 while keeping the terms unchanged.
Groups representing a total of around 30 percent of Tandberg shareholders have publicly demanded a higher offer than Cisco's price of 153.5 crowns a share. Cisco needs 90 percent approval to close the deal, which analysts say would create a strong leader in video communications.
Analysts said Cisco could ultimately offer around 160 to 170 crowns.
"This confirms what we have believed for a while ... the big majority wants to wait and see how this develops," said analyst Tore Tonseth from Argo Securities. "There's no point in accepting, when you see that 20-30 percent of shares are not accepting."
Cisco said on Tuesday if it does not win 90 percent acceptance by the new deadline, it will evaluate whether to withdraw the offer.
The company has said its offer is a "fair price" representing a 38.3 percent premium to the closing share price on July 15, before the media reported a possible deal. Tandberg's board of directors have also backed the offer.
Cisco Chief Executive John Chambers said last week that he believed the deal will close. But he also raised the prospect of walking away, saying that there was no such thing as a "must have" deal and that Cisco needs to be financially prudent.
Few analysts, however, expect Cisco to drop its bid as it has repeatedly touted online videoconferencing as a key growth area.
Most expect a higher offer. Strong quarterly results from Tandberg also supported those calling for a higher offer, analysts said.
"A range of 160-170 (crowns) is a natural place to go to," Argo's Tonseth said. "A lot has happened since Cisco made the offer. The market has rallied, and Tandberg has delivered strong results."
Ole Joergen Roed, analyst at First Securities, said Cisco was unlikely to win a substantially higher acceptance in the extended period, and that Cisco will probably increase the offer price.
"They will have to go to at least 170 crowns," he said
No company has yet publicly shown interest in Tandberg. But analysts have said that regardless of whether and how the Cisco-Tandberg deal closes, it could trigger more transactions involving videoconferencing companies like No. 2 player Polycom Inc PLCM.O. Hewlett-Packard also offers high-end video conferencing.
Cisco could keep extending the deadline and continue to negotiate with shareholders for a maximum of 10 weeks, or until mid-December.
Tandberg shares were little changed at 151.5 crowns by 0910 GMT.
(Additional reporting by Richard Solem and Tarmo Virki; Editing by Greg Mahlich and Derek Caney)
$1 = 5.596 Norwegian crowns