When Cisco put together its first acquisition bid for the Norwegian videoconferencing-systems vendor, it failed to grasp the dynamics of the situation. It should have (and must have) known that the deal was contingent on shareholder approval from those possessing 90 percent of total public stock. Cisco also should have had a better read on the tolerance and willingness of major blocs of Tandberg shareholders to accept the proposal Cisco originally advanced.
Clearly something was lost in translation. Cisco’s first bid, approved unanimously by Tandberg’s board of directors, fared less well with Tandberg’s shareholders, a substantial percentage of whom rejected it. The dissident shareholders, comprising several influential and large blocs, were organized in their opposition and clear about what they felt would be an acceptable offer.
What they wanted as a minimum bid is strikingly similar to the revised offer they received from Cisco. I’m sure that isn’t a coincidence. With better due diligence, Cisco might have read the situation correctly the first time and gotten the deal done with its initial proposal.