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The videoconferencing firm is considering Cisco's $3 billion acquisition offer despite disfavor among large shareholders
By W. David Gardner
Tandberg reported an increase in third quarter profits Thursday and the Norwegian videoconferencing firm said it is considering going ahead with Cisco's $3 billion acquisition offer, even after a group of shareholders rejected the offer.
Tandberg said its profit rose to $50 million -- an 11% increase -- in the quarter, beating most forecasts. Its revenue rose 12% to $235 million and the company's chief executive, Fredrik Halvorsen, attributed the gains mostly to the firm's U.S. performance.
At the same time, 21 large shareholders representing 24% of Tandberg stockholders are seeking to bid up the acquisition price. In a presentation, Halverson said: "There have been favorable reactions from partners, customers, and employees to the Cisco offer." He added that the U.S. public sector was the main driver of the company's business.
Discussing its Americas business, Tandberg said: "The commercial business continued to experience prolonged sales cycles, but the team executed well in all areas and gained momentum in network sales."
Tandberg reported $809 million in revenue for 2009 and the company's management and directors have said they feel the Cisco offer is fair. Cisco has been aggressively moving beyond its traditional strengths in routers and switches and has marked videoconferencing as a prime growth sector.
Tandberg has been a supplier of videoconferencing equipment to Cisco rival HP. Cisco and HP are coming increasingly in competition with each other, particularly since Cisco began marketing servers more aggressively in recent months.
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