Cisco on Tuesday said that a mere 9.37 percent of Tandberg shareholders have accepted the company's cash offer.
In October, Cisco offered $3 billion in cash for Tandberg in a deal that looked relatively simple. Cisco would gobble up Tandberg and beef up its video conferencing arsenal. However, some Tandberg shareholders balked at the deal. Tandberg management has urged shareholders to take the Cisco offer.
But most shareholders are sitting on the fence waiting for others to make their decisions. In a statement, Cisco said it needs 90 percent of Tandberg shareholders on board. Cisco already extended a deadline from Nov. 9 to Nov. 18. Once Nov. 18 passes, Cisco said it will evaluate whether to extend or withdraw the offer.
On an earnings conference call with analysts last week, Cisco CEO John Chambers addressed the Tandberg deal:
We view tele-presence at the high-end to be extremely effective for Cisco and make no mistake about it, we have caught the imagination of both enterprise leaders and service provider leaders on what this can mean. You are now seeing companies like Procter & Gamble and GE really be able to take that concept down though not just for executives or not just for communication but completely changing business models, supply chains, productivity, how instead of workers going to where the work is you bring the work to where the employees are located. So you are seeing that market transition.
Where we were missing was at the mid level and at the desktop level and some of the open architectures, so they are a perfect match for us in terms of the combination of the two.
Tandberg shareholders appear to believe that Cisco will raise its bid for the company. Indeed, Tandberg has some impressive growth rates. However, Cisco could just as easily go shopping elsewhere.
On Monday, Cisco said in a regulatory filing that it would raise $5 billion in cash via a bond offering. Cisco already has a war chest of $35 billion in cash, equivalents and investments as of Oct. 24.