UPDATE 3-Tandberg pares losses after Cisco bid drop talk

By Aasa Christine Stoltz and Georgina Prodhan OSLO/LONDON, Oct 30 (Reuters) - Shares in videoconferencing company Tandberg were hit by a Bloomberg report that would-be acquirer Cisco might walk away from its $3 billion bid, but partially recovered after a halt in trading. The takeover offer from Cisco, the world's biggest maker of network equipment, has been recommended by Tandberg's board of directors but investors holding 24 percent of Tandberg shares have snubbed the bid, hoping they can force a higher offer. Bloomberg reported on Friday that Cisco would strongly consider walking away if it could not secure the required 90 percent approval for its existing bid, citing a person familiar with the transaction. Cisco reiterated it believed its offer to be fair. "We are aware of recent speculation in the market and as we are currently in the middle of a tender offer process, we are not able to comment," a spokeswoman said. "We have stated previously that we believe we are paying a fair price for a quality asset, and our offer comes recommended by the Tandberg board of directors." No counterbidders have so far emerged. Cisco launched a one-month tender on Oct. 9. The cash-rich company hopes to capture a swathe of the fast-growing corporate video communications market by buying Tandberg, to fill the gap between its existing telepresence and Webex offerings. The Oslo bourse suspended trading in Tandberg after the shares fell 2.7 percent to 152.30 Norwegian crowns, below Cisco's offer of 153.50 crowns per share. They later pared losses and by 1455 GMT were 1.5 percent lower at 154.10 crowns. "The reason was mainly the news from Bloomberg, which was based on an anonymous source," an Oslo stock exchange spokeswoman said. "We have investigated the matter, and based on that we have no reason to uphold the trading suspension." ($1=5.658 Norwegian Crown) (Reporting by Oslo newsroom, Georgina Prodhan and Raji Menon in London and Christoph Steitz in Frankfurt; editing by Simon Jessop and David Cowell) Keywords: TANDBERG SHARES/ ([e-mail]; [phone]; Reuters messaging: rm://[e-mail]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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