Cisco Gets 89 Percent of Tandberg Shares, Waives 90-Percent Condition

Those of you of a certain age will remember the immortal words of Maxwell Smart, played by Don Adams, in the sitcom television series “Get Smart.” When Smart or one of the other characters came tantalizingly close to a target or a goal, he would say: “Missed it by that much.”

Cisco’s CEO John Chambers and his lieutenants must have been doing their best impressions of Maxwell Smart today as they watched their percentage of tendered Tandberg shares inch toward the 90-percent threshold that had been set as a condition for Cisco’s $3.4-billion acquisition of the Norway-based videoconferencing-systems vendor.

As of the deadline today, Cisco had 89 percent of Tandberg shares in its pocket, not quite enough to close the deal. Still, Cisco got close enough to justify a waiver of the 90-percent condition. From a Cisco press release posted to the website:

In the voluntary public cash offer to acquire all outstanding shares in TANDBERG, Cisco (NASDAQ: CSCO) announces that following the expiration of the offer period at 5:30 pm CET on December 3, 2009, Cisco controls approximately 89 percent of the outstanding shares in TANDBERG (OSLO: TAA).

The received acceptances represent a lower acceptance ratio than the 90 percent condition to the offer set out in Section 1.7 in the offer document dated October 7, 2009. However, Cisco has decided to waive this 90 percent condition.

There may be adjustments to the preliminary result due to possible corrections and changes following registration with the Verdipapirsentralen (VPS). The final result will be published as soon as it is available.

Cisco intends to complete the voluntary public cash offer subject to the satisfaction or waiver of the remaining conditions to the offer as set forth in the offer document, Section 1.7, as soon as possible. Assuming completion of the offer, Cisco will in relation to the remaining shares in TANDBERG proceed as required under chapter 6 of the Norwegian Securities Trading Act.

The process of acquiring Tandberg has not gone well for Cisco. On the whole, Cisco must be embarrassed by the episode. It wasn’t an unmitigated disaster, though, and Cisco now has a chance to move ahead with its Tandberg integration and with its plans for dominance of video-based collaboration and communication.

Cisco has traveled a bumpy, potholed road on its quest to close the Tandberg acquisition. The tactical missteps in the botched execution of the deal have obscured the reality that Cisco’s strategic reasons for pursuing Tandberg were exceptionally sound.

Cisco now has an opportunity to put this saga behind it. Lessons presumably have been learned.


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