Ericsson Bids $1.4B for Tandberg TV


A bidding war has emerged for Tandberg Television, with Ericsson announcing an all-cash offer Monday worth about $1.4 billion for the maker of video-processing equipment -- 10% more than Arris’ bid earlier this month for Tandberg.

Ericsson is offering 106 Norwegian kroner per share of Tandberg, which is traded on the Oslo stock exchange. Arris Feb. 15 officially launched a tender offer for Tandberg for 96 kroner, comprised of at least 83% cash with the rest in stock.

Winning the deal would let Ericsson hit the market for IPTV systems running. Rival telecommunications-gear maker Alcatel-Lucent has won some major IPTV contracts with telcos around the world.

In announcing the counterbid, Ericsson CEO Carl-Henric Svanberg characterized IPTV as “the biggest networked multimedia opportunity” for the company. “Ericsson and Tandberg Television is a strong combination with a unique ability to offer complete IPTV solutions,” he said in a prepared statement.

Ericsson said Tandberg, which has 870 employees, would become a wholly owned subsidiary once the deal was completed.

Ericsson added that it has acquired 11.7% of the outstanding shares in Tandberg and that it has agreements from holders of another 13% that they will accept the Ericsson bid.

Tandberg, with U.S. operations in Duluth, Ga., makes video-encoding equipment used by cable, telco and satellite-service providers.

The winning bidder for Tandberg must receive the approval of shareholders who own more than 90% of the company’s shares.

In other Tandberg news, the company announced the launch of its iPlex UltraCompression HD and standard-definition IPTV headend, which is based on its second-generation AVC platform, Intelligent Compression Engine (ICE3).

The vendor said the new system delivers bandwidth improvements of up to 50% over previously deployed MPEG-4 AVC units.

The iPlex will debut at the IPTV World Forum in London March 5-7.