Ericsson's $1.4 Billion Bid For Tandberg May Prompt Response By Arris - InformationWeek

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Ericsson's $1.4 Billion Bid For Tandberg May Prompt Response By Arris

At stake is the rapidly emerging TV-over-the-Web market, as well as additional telecommunications infrastructure services and products.

A bidding war for Tandberg Television between suitors Ericsson and Arris Group is under way with the ball now in the Arris court after Ericsson announced a surprise cash offer for Tandberg.

Ericsson's 9.8 billion Swedish krona ($1.39 billion) offer on Tuesday for the Norway-based firm was 10% higher than the offer Arris made last month.

At stake is the rapidly emerging TV-over-the-Web market, as well as additional telecommunications infrastructure services and products. Tandberg makes software for IP television, HDTV, video on demand, advertising on demand, and interactive TV applications. The company provided an interactive experience that coincided with the broadcast of the 64th annual Golden Globe Awards on NBC in January.

Tandberg management had backed the Arris bid and, while it called the Ericsson offer "unsolicited," stockholders appeared to believe there will be a higher counteroffer, as they bid Tandberg stock prices to a premium. U.S.-based Arris was said to be considering making a higher offer, according to media reports.

The contest for control of Tandberg is the latest in a series of consolidation moves in the telecommunications industry, often across country lines. Ericsson has been on an acquisition binge lately, picking up router manufacturers Redback Networks and digital video specialist Entrisphere.

Tandberg employs 870 people, including more than 370 video and software engineers. Tandberg's revenue in 2006 was $350 million (USD) with a growth of 21%.

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