Investors holding 24 percent of shares in videoconferencing firm Tandberg snubbed a $3 billion bid from Cisco Systems Inc, raising prospects of a higher offer from the U.S. network equipment maker.

Cisco made its 153.50 crowns-per-share move for the Norwegian firm in October in a bid to dominate the fast-growing corporate video communications market, and Tandberg's board recommended the cash offer.

We think the price is too low, said Amund Lunde, chief executive of life insurance group Oslo Pensjonsforsikring, a shareholder with 1 percent of Tandberg's stock and among the group of shareholders that have turned Cisco down.

He declined to suggest a price the group might accept.

A Norwegian analyst said it was not unthinkable Cisco could now raise the bid to 170 crowns, but there were few early signs in the market of bets on a higher offer as Tandberg shares crept 1.1 percent higher to trade just above the offer price at 154.30 crowns. The main Oslo index .OSEBX was up 0.2 percent.

Conglomerate Orkla, which holds 2.2 percent of Tandberg's stock and has earlier been seen as an activist shareholder in Norway, declined to say if it was part of the shareholder group or give comments on the bid.

The one-month tender period for Tandberg shareholders began on October 9, and Cisco needs acceptances from at least 90 percent of shareholders to fully acquire the company.

However, it might opt to acquire a smaller stake, analysts say.

On behalf of 21 shareholders representing above 24 percent of the outstanding shares in Tandberg, SEB Enskilda has ... communicated to Cisco that these shareholders do not intend to tender their shares at the current offer terms, brokerage SEB Enskilda said in a statement on Thursday.

It said the shareholders are convinced Tandberg will generate strong returns as an independent company, though they are open to evaluating a higher offer from Cisco or a third party.

We are aware of statements made by Tandberg shareholders and as we are currently in the middle of a tender offer process, we are not able to comment, said a spokeswoman for Cisco.

ANALYSTS SPLIT

Cisco's offer values Tandberg at about 23 times next year's projected earnings, slightly above U.S. rival Polycom's multiple of 21.7.

Some analysts pointed to Cisco's recent plans to acquire wireless equipment maker Starent Networks at almost 40 times Starent's 2010 earnings estimates, a multiple Cisco has not paid since it bought WebEx in 2007.

We believe it is not unthinkable that Cisco will pay up to 170 crowns per share. It's important to underline that as many as 24 percent has formed a group and refuses to sell, said Fredrik Thoresen in DnB NOR Markets.

However, analyst Tore Tonseth in Argo Securities said he expected a large majority of Tandberg shareholders would accept Cisco's offer as it valued Tandberg at a fair price.

One needs to be prudent when calculating how many synergies existing shareholders can reap out of Cisco, Tonseth said, adding Tandberg shares could drop to 120-130 crowns if Cisco walked away.

Tandberg was due to report third-quarter figures after market close on Thursday.

(Additional reporting by Tarmo Virki in Helsinki; editing by John Stonestreet)

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