OSLO, NORWAY: U.S. network equipment maker Cisco System is to buy Norway's video-conferencing equipment maker Tandberg ASA for an agreed 17.2 billion crowns in cash, the companies said on Thursday, lifting Tandberg shares.

The offer, worth 153.5 crowns per Tandberg share, represented a premium of 11 per cent to its closing price on Wednesday, Tandberg said on Thursday.

"Tandberg's board of directors has unanimously decided to recommend to its shareholders to accept the offer," the company said.

However, analysts were split over the offer price, which some labelled as fair while others said it was too low and Tandberg's share price rose as much as 12.8 percent to a high of 156 crowns before easing back to 154 crowns by 0753 GMT.

Cisco shares traded in Frankfurt were 1 per cent lower at 15.98 euros ($23.28). The shares closed trading on Nasdaq on Wednesday at $23.54.

"This sounds like a pretty good price so I would think it will end up there," analyst Martin Hoff at Arctic Securities said. "But the bid will stand for four weeks and there might be other (offers)," he said.

Carnegie analyst Espen Torgersen said the probability for a competing bid was low, but not impossible.

"From an industrial perspective, this is right for the company," Torgersen said, adding that the price was "highly acceptable".

But DnB NOR Markets -- which has a share price target of 165 crowns -- said the bid seemed too low, and believed competing bids may emerge.

DnB NOR Markets named in a report companies such as Hewlett-Packard, Juniper, IBM, Sony and Siemens as potential suitors.

Cisco Systems said Tandberg's chief executive Fredrik Halvorsen would continue to lead the unit.

Tandberg said that major shareholders had voiced support for the deal. "There are major shareholders out there that have sent their congratulations over the course of the day... We really appreciate your support," CEO Fredrik Halvorsen, told a telephone conference.

Cisco CEO John Chambers said he was "very comfortable" with the prospects of winning regulatory approval for Cisco's purchase of Tandberg.