Geelmuyden.Kiese

TANKER

THE LYSAKER-RIOT
15.12.2009

Thursday, October 1st, 2009. The autumn sun laid low over Lysaker. Tandberg’s meeting room, Norway’s IT crown jewel, was filled to capacity by the capital’s finance journalists. In the centre of attention: Jan Chr. Opsahl, the visionary and successful industrialist, who personally built Tandberg from the ground up, Fredrik Halvorsen, the industry’s wonderboy, and John T.Chambers, top executive and Chairman of the Board at Cisco.

The stock exchange report had just been released a few minutes earlier: Cisco bids 153.50 NOK per Tandberg-stock. The bid is supported by Tandberg’s board of directors and presupposes a 90 percent acceptance deadline. Fairness opinions from international investment banks support the estimated value of 17, 2 billion NOK. The remaining 10 percent of shareholders would be forced to redeem their take before Tandberg could fully integrate with Cisco.

The celebratory cheers fill the room. It’s like the 17th of May and the 4th of July combined. The negotiations which had been ongoing since summer, was crowned with victory. Everybody was pleased. Opsahl had found a company which could develop Tandberg further, Chambers gained access to new and valuable competence; the clients would get an even stronger supplier and the employees a new and strong owner. Fredrik Halvorsen was pleased as well. The fresh, unlimited budget approval to develop Cisco’s future video solutions was tucked away safely in his pocket.

From a communication point of view though, something was a bit fishy. Where were the principles for good and appropriate management and corporate direction? Why were the CEOs standing closely together, grinning as if they were celebrating a merger? Didn’t the stock exchange report say acquisition?

At Oslo Stock Exchange, the Tandberg stock was up by ten percent. Later, the stock surpassed 153, 50 NOK. Was there a riot on the way? No 17th of May? Could anybody be dissatisfied when the employees, the board and most likely the clients were cheering?

-Personally, I find it to be utterly uninteresting whether the asking price is at 100 NOK or 150 NOK, said Opsahl. The Shareholders were obviously interested in the asking price. The bid was also interesting for Halvorsen and eight other Tandberg executives. Approximately 80 million NOK was released in compensation for the Tandberg executive, according to deals entered prior to the announcement of the bid. The shareholders were fuming.

The American veteran investor, Guy Wyser-Pratt, also called “Rambo”, was not impressed. According to Wyser-Pratt, the board and management of Tandberg did not ensure the stakeholders interests. Orkla, Oslo Pensjonforsikring, Delphi Fondene and the Rasmussen family were not impressed. SEB Enskilda, who organized the Lysaker-riot, was not impressed.

“With an acquisition bid, it’s the board’s primary responsibility to ensure all shareholder interests, and to ensure equality amongst all shareholders. We expected a substantially higher premium on an acquisition bid for Tandberg”, Rasmussen – director, Rune Selmar, wrote to Dagens Næringsliv.

Cisco’s interest analysis in Tandberg’s communication plan had severely miscalculated the shareholders. The unified Cisco-Tandberg communication had failed. Cisco would not reach a 90 percent acceptance degree. The industrial dream was endangered.

An extensive rescue operation was initiated. Weeks of “random” blogging from leading Cisco employees, articles with reference to so called sources close to the company, read: communications advisors and lawyers, where the objective was to pressure the shareholders, in addition to extensive advisor/consultant activity. It was all needless. The damage was irrefutable, particularly by using cosmetic communication methods. Cold hard cash was the only solution.

November 11th, 2009, was the day of surrender. The bid increased to 170 NOK per stock, corresponding to an estimated value of 19 billion NOK for Tandberg. Friday, December 4th, 2009, the 90 percent acceptance limit was finally met.

Tandberg’s further success ride could start. Left behind were the advisors. A little wiser about what not to do at the next acquisition cross-road. Left behind was Polycom. Worrying about an even stronger main competitor. Left behind were the Lysaker-rioters. Scouting for the next stock exchange report.

Geir Bjørlo