Scare tactic or serious? Cisco may drop TANDBERG bid

Halloween is over folks, but Cisco is trying to get scary with its negotiations for TANDBERG. With its latest move, the networking giant hopes to put a little fear into some of the investors blocking its path to acquire the video technology manufacturer. Last week, news  emerged that Cisco was reportedly ready to walk away from the $3 billion deal to purchase TANDBERG after investors blocked the deal and demanded a higher bid.

In early October, Cisco Systems launched a bid to buy TANDBERG, the video conferencing equipment manufacturer, for $3 billion. The move enables Cisco to bring in more personal video technology to supplement its room-sized teleconferencing systems. It was mid-October when disaster struck: TANDBERG's minority shareholders--who own just over 24 percent of the video conferencing technology provider--rejected Cisco's $3 billion bid as too small.

Some other players in the space might rejoice to see two rivals forming a mega-telepresence play being forced to part ways on the whims of a few minority shareholders. Speculation was rampant that the deal might spell doom for Polycom, although they explained to us that the merger would be more of a boon for their rival services.

So far, the news of Cisco walking away is not quite official, with some analysts claiming that the rumors are just Cisco playing tough to get investors to agree to their offer. The New York Times Deals Blog posits that the company's threat to walk away reveals that some factions in the company want fiscal responsibility in light of the growth-by-merger strategy that Cisco has recently adopted.

For more:
- read this article from Phone+
- see this post by The New York Times on Cisco rethinking its strategy

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