Ericsson makes hostile bid for Tandberg Television

L.M. Ericsson bid $1.4 billion in cash in a hostile move to acquire Norway’s Tandberg Television.
The Swedish infrastructure company, which is moving aggressively into the digital content space, topped a previous offer from Arris Group Inc., an Atlanta-area provider of cable equipment. Tandberg’s directors had previously approved the Arris bid; the company said its board will review Ericsson’s offer and issue a recommendation.
The announcement is the latest in a series of aggressive moves by Ericsson to expand into digital content. The firm operates mobile music services for several European and Asian carriers, and earlier this month unveiled a deal to bring Turner Broadcasting System content to wireless handsets.
Ericsson already owns a 12-percent stake in Tandberg, which netted $12.1 million in the fourth quarter on sales of $85.3 million.
“IPTV for cable and telecom operators is the biggest networked multimedia opportunity going forward,” Ericsson CEO Carl-Henric Svanberg said. “Tandberg’s leading TV technology and customer and base combined with our global presence and strong position in IP networks and IMS will create a leading player in networked media solutions for telecom, cable and satellite operators as well as media companies.”
Shares of Ericsson inched upward 25 cents to $37.06 on the news; Arris shares tumbled $1.55, or more than 10 percent, to $13.74. Analysts generally agreed that Arris isn’t likely to up the ante following Ericsson’s bid.
“We believe Arris will walk,” ThinkEquity Partners L.L.C. wrote in a research note. “Clearly, valuations in this space are going up with numerous acquisitions occurring in the last 12-18 months in particular, seemingly at an accelerated pace.”