Tandberg takeover dubbed 'historic'
October 2, 2009
Cisco Systems of California has launched a bid for Lysaker-based video conferencing firm Tandberg that ranks as the largest takeover in Norwegian history. There were smiles all around when the deal was announced, as directors and top managers who’ve agreed to it stand to pocket both hefty gains and contracts to stay on board.
At the center of it all is Tandberg’s young chief executive Fredrik Halvorsen, a former McKinsey consultant who took the helm in December 2005 just before turning 32 years old. Since then, Tandberg has delivered strong results and its share price has soared by nearly 350 percent.
Cisco’s top executives said its offer to take over Tandberg, for NOK 153.50 per share, hinged on getting Halvorsen to stay with the company. He now is poised to gain full responsibility for all of San Jose-based Cisco’s operations within video and video communications. As many as 40 of Tandberg’s top executives have also signed contracts to continue working for Cisco for at least three years.
Cisco CEO John Chambers said he considers video and video communications to have the largest growth potential within the company, and that staffing after the takeover was more likely to increase than decline. Cisco currently has around 67,000 employees.
Tandberg, by comparison, has 1,500 employees but has ranked as the largest info-tech firm on the Oslo Stock Exchange with an estimated share value of NOK 17 billion. Cisco’s bid is valued at NOK 17.2 billion and is likely to succeed, although some analysts claimed it was too low. Some noted that the deal also eliminates a potential competitor for Cisco.
Several Tandberg workers who held stock themselves stand to profit on the deal, with the now-35-year-old Halvorsen himself pulling in NOK 44 million on a sale of his stake, for a total of NOK 80 million over the last four years in terms of salary, bonus and stock gains, according to newspaper Dagens Næringsliv (DN) .
Tandberg chairman Jan Christian Opsahl, who spent 21 years building up the firm that’s rooted in the old Tandberg radio empire, will also log a healthy gain and seemed thrilled by the deal, calling it the type “that happens only once in a lifetime.” At the same time, he bashed business possibilities in Norway.
“We have no culture to build up global businesses in Norway,” he claimed. “We’ve had some success with oil … but if you look at the high-tech industry, it’s been a complete catastrophe.”
A long list of Norwegian tech firms have ended up either being taken over, going out of business, or simply de-listing because of a lack of investor interest. Fast Search & Transfer, for example, was taken over by Microsoft, and Trolltech was taken over by Nokia. DN reports that Tandberg will be the 14th info-tech firm to leave the Oslo Stock Exchange during the past two years.