Tandberg TV Board OKs Ericsson Deal
Board of Directors: Vote Against Arris’ Proposal
By Todd Spangler -- Multichannel News, 3/7/2007 12:29:00 PM
Tandberg Television's board of directors unanimously recommended to shareholders that they accept the unsolicited bid worth $1.4 billion from Ericsson.
Ericsson last week effectively spoiled Arris' bid for Tandberg with its offer of 106 Norwegian kroner ($17) per share of Tandberg, 10% higher than Arris' cash-and-stock bid worth 96 kroner ($15.39).
"It is the directors' opinion that Ericsson's offer represents a compelling opportunity for the shareholders of Tandberg Television and it is a superior offer compared to the offer from Arris," the Tandberg board said in a prepared statement.
The statement noted, "Ericsson's offer does not subject Tandberg Television shareholders to the risks or potential benefits of changes in Arris' share price after completion of the transaction."
Tandberg's board had earlier recommended the Arris deal, which "delivered the highest value to Tandberg Television's shareholders at that time," it said.
Tandberg said it notified Arris that it has withdrawn its recommendation that shareholders accept the Arris bid, and it will pay an $18 million breakup fee to Arris by March 8.
Ericsson's offer must be approved by shareholders who own more than 90% of the voting shares of Tandberg.
Ericsson acquired an 11.7% stake in Tandberg, and it also said it has agreements from holders of another 13% that they will accept its bid. Tandberg's board of directors pointed out that Ericsson's ownership stake would prevent the 90% acceptance condition to the Arris offer unless Ericsson were to sell its stake or support the Arris offer.
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