Cisco Takeover of Tandberg Tripped

(MoneyWatch)  One smart move deserves another. And just as Cisco made an intelligent play for Tandberg in a proposed acquisition worth $3 billion cash, a group heavily invested in the Norwegian videoconferencing company made an even better one and is gumming up the works.

It's all about the Benjamins, of course. Lots of them. All cash. According to the New York Times:

The all-cash tender offer has been recommended to Tandberg's shareholders by that company's directors and stands as an 11 percent premium over Tandberg's closing price on Wednesday. Tandberg reported $809 million in revenue last year, and has close to $200 million in cash.d

Uh uh uh -- not so fast. It seems that not everyone is copacetic with the deal announced at the beginning of October. A group of investors that owes 24 percent of the company has said thanks, but no thanks, Cisco -- unless you'd like to sweeten the pot. The group, comprising 24 investors, has said that $27.61 a share is inadequate, though apparently it hasn't made a counter-offer. The problem facing both Cisco and Tandberg is that Cisco needs a vote from 90 percent of the shareholders. That simply can't happen without the blessing of this investment group.

It will happen, after Cisco shakes out more greenbacks from its coffers. The current offer is not going to make the dissident investor group happy because an 11 percent bump just isn't that much when you see the money that Dell is putting out for Perot Systems, for example -- or that Cisco is paying a 20 percent premium for Starent and has something like a $35 billion war chest, more than any other tech company.