Ericsson has announced a public cash offer to acquire Tandberg Television (OSE:TAT) for NOK 106 in cash per share or approximately SEK 9.8 bln. The offer represents a premium of 18.2% to Tandberg’s 90-day volume weighted average stock price and a premium of 10.4% or NOK 10 per share to the proposed mixed cash/share offer announced January 15 by Arris.
This is seen as a significant step toward world leadership position in IPTV as it expands Ericsson’s customer base to include cable and satellite operators as well as broadcasters.
Carl-Henric Svanberg, president and CEO, Ericsson, said: “IPTV for cable and telecom operators is the biggest networked multimedia opportunity going forward. Ericsson and Tandberg Television is a strong combination with a unique ability to offer complete IPTV solutions. Tandberg’s leading TV technology and customer base and 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.”
A large part of the expected traffic growth in the world’s mobile and fixed networks is expected to be generated by TV services. Tandberg is a world-leader in video head-end, encoding and compression technology critical to maximize picture quality while minimizing bandwidth in video applications. This technology is a key part of IPTV solutions. Tandberg is particularly strong in MPEG-4 which is critical for cost effective delivery of High Definition TV. In addition, Tandberg offers on-demand and interactive video solutions.
IPTV is key in multimedia offerings from telecom operators as well as cable and satellite operators. Today the majority of digital TV network investments are made by cable operators while telecom operators are quickly increasing their investments from a lower level.
Tandberg’s revenues in 2006 were USD 350 mln with a growth of 21%. EBITDA reached 21% in 2006. Since 1997, Tandberg Television has been listed on the Oslo Stock Exchange.
Upon completion of this transaction, Tandberg Television will become a wholly owned subsidiary of Ericsson. In combination with Ericsson’s existing products the combined companies will be uniquely positioned in offering complete IPTV solutions.
Ericsson has acquired 9,399,150 shares representing 11.7% of all shares outstanding in Tandberg Television. Furthermore, holders of approximately 13% of the outstanding shares and votes of Tandberg Television have irrevocably agreed to tender their shares in the cash offer.
