“Is a 38.3% premium fair for Tandberg shareholders? Absolutely. Does it lock in a superior return for Tandberg shareholders and protect them from future market risk? Yes. Does it also fairly reflect risks borne exclusively by Cisco shareholders? Yes.”

– Cisco Chief Strategy Officer Ned Hooper

Cisco strongly believed that its first bid for videoconferencing equipment manufacturer Tandberg was a very good price for the company’s shareholders. The company felt as well that “no acquisition should be pursued or completed if it runs counter to the broader principles of prudence and financial fairness.” Cisco really did not want to sweeten its initial offer for Tandberg–a 38.3 percent premium over the company’s closing share price on the day before news of a possible acquisition broke.

But it did so anyway.

This morning, Cisco (CSCO) raised its bid for Tandberg to 19 billion Norwegian kroner ($3.4 billion), up from $3.0 billion. “The New Offer represents the…final price for this transaction,” Cisco said in a statement. “If the offeror does not achieve the desired level of acceptances, the offeror will withdraw the new offer and evaluate alternative ways to expand Cisco’s activities in the video communications market.”

“Soon after expiration of the extended offer period on 18 November 2009 at 5:30 pm CET (1630 GMT), Cisco will announce whether the 90 percent condition for the offer has been met,” the company said in a filing this morning. “If not, Cisco will evaluate whether or not to withdraw the offer.”

But frankly, Cisco’s probably doing that already. After all, the company currently holds rights to acquire just 9.37 percent of Tandberg. And last Friday, minority shareholders Panta Capital and Scott Associates AG issued a public letter dismissing Cisco’s bid as too low, echoing comments made by a group of investors that controls 24 percent of Tandberg’s shares back in October.

So Cisco has a little more than a tenth of the investor support it needs to go through with the takeover. Unless it raises its bid to overcome the resistance of shareholders who believe it is too low, it seems it’s offer may come to naught though Tandberg’s board has unanimously accepted it.

Excluding one-time items, Cisco (CSCO) said it earned 36 cents a share, down from 42 cents a share in the same period last year. Still, that was better than the consensus estimate. Analysts polled by Reuters had expected the company to deliver a profit of 31 cents a share on sales of $8.745 billion.

“Building off what we saw as a clear tipping point in Q4, our Q1 results continued to reflect strong sequential growth trends that meet or exceed expectations during normal economic times,” CEO John Chambers said in a statement.

“We view the improving economic outlook, combined with solid execution on our growth strategy, as creating unparalleled opportunity to drive more value into the core of the network,” Chambers continued. “Simply said, we believe that key market transitions across collaboration, virtualization and video will drive productivity and growth in network loads for the next decade, and are evolving even faster than expected.”

At $24.20, shares in the company are trading up nearly four percent on the news.

With V-Block, clients can build “private clouds” from which to draw computing resources. It’s an ambitious effort designed to capture a bigger piece of the IT infrastructure market by offering large unified systems designed to handle most of a business’s computing needs. As Cisco CEO John Chambers noted earlier today, the goal here is to more effectively target the market for cloud infrastructure and services, a market that could be worth as much as $350 billion.

It’s also a market loaded with with fierce competitors, IBM (IBM) and Hewlett-Packard (HPQ) among them. Not that this worries Chambers much. “Will this change the industry?” he asked during a conference call today. “Time will tell. I believe that it will be the partnership that people will look back on and say it changed the data center and clouds forever.”

The deal gives Cisco (CSCO) a foothold in China’s massive cable market, whose 160 million subscribers make it the largest in the world. And with the Chinese government mandating full digitization by 2015, this figure could grow to 200 million in as little as three years.

“That presents for Cisco and other competitors in the market a very, very compelling market opportunity,” Hilton Romanski, VP of corporate development for Cisco, told Reuters. “What we’re trying to get access to is good local expertise that can help us think about how to make this transition, becoming an increasingly local company in China.”

Remarking today on speculation that Cisco (CSCO) would do just that, Ned Hooper, the company’s chief strategy officer, stressed that Cisco “will always act with fiscal prudence” as it pursues Tandberg. “We strongly believe our offer is a very good price for Tandberg shareholders,” Hooper wrote, adding that the time is right for the two companies to come together.

“However, no acquisition should be pursued or completed if it runs counter to the broader principles of prudence and financial fairness,” Hooper cautioned. “Given all the speculative ‘noise’ last week,” he added, “I wanted to take the time to reiterate these points because it is important to me, and to Cisco, that all of our stakeholders understand our position as we near the end of the offer period.”

Now Hooper didn’t come right out and say it, but his message here is pretty clear: Cisco believes the 38.3 percent premium it has offered to pay for Tandberg is a fair one and is not particularly interested in raising it just to please some ornery shareholders.

And time is running out. Note that Hooper concludes his missive by explicitly pointing out that the end of the offer period is approaching.

Sources tell Bloomberg that Cisco (CSCO) has little intention of meeting the demands of a group of investors who would like it to reach a bit deeper into its wallet before they hand over their 24 percent stake in Tandberg, the world’s second largest manufacturer of videoconferencing kit. Cisco would rather walk away than sweeten a bid that represents a 38.3 percent premium on Tandberg’s closing share price on the day before news of a possible acquisition broke.

Or that’s what Cisco wants them to think, anyway. Because scrapping what is a pretty strategic deal for the company would be silly at this point given Cisco’s huge cash reserves. Rumors that it would “strongly consider walking away” from Tandberg are likely more gamesmanship than anything else.

“I think it’s quite unlikely that they’ll drop their offer, everything points to them buying Tandberg,” Arctic Securities analyst Martin Hoff told Bloomberg. “It’s probably smart of them to send some signals to scare the shareholders into accepting the offer.”

This morning, Cisco (CSCO) announced plans to purchase the software-as-a-service security vendor for roughly $183 million in a bid to expand its Web security portfolio both on-premises and in the cloud. Among ScanSafe’s clients: Google (GOOG), AT&T (T) and Sprint (S).

“With the acquisition of ScanSafe, Cisco is executing on our vision to build a borderless network security architecture that combines network and cloud-based services for advanced security enforcement,” said Tom Gillis, vice president and general manager of Cisco’s Security Technology Business Unit, in a statement. “Cisco will provide customers the flexibility to choose the deployment model that best suits their organization and deliver anytime, anywhere protection against Web-based threats.”

Expected to close in the second quarter of 2010, the deal–Cisco’s sixth acquisition of the year–comes on the heels of the Barracuda Networks acquisition of security SAAS vendor Purewire.

Earlier this year, Cisco (CSCO) acquired Pure Digital, developer of the Flip video camera, for $590 million. Two weeks ago, the company spent $3 billion on videoconferencing system maker Tandberg. And now it’s purchasing wireless infrastructure outfit Starent Networks (STAR) for $2.9 billion, or $35 a share. That’s a 21 percent premium over Starent’s closing price on Monday of $29.03, but it’s likely money well spent for Cisco.

Starent makes hardware and software to support wireless multimedia services, an obvious sweet spot in the data services market right now. Indeed, Cisco expects global mobile data traffic to more than double every year through 2013. Which makes Starent a pretty good growth bet, from on acquisition standpoint.

People familiar with the matter tell The Wall Street Journal and Bloomberg that Brocade (BRCD) is seeking a buyer and that both Hewlett-Packard (HPQ) and Oracle (ORCL) are among its potential suitors. No deal is imminent, but rumor that one might be coming was enough to spike Brocade’s shares some 15 percent.

It’s easy to see why Oracle and HP–and IBM (IBM) as well–might be interested in Brocade. The company’s portfolio of data-networking products and services would do much to help HP take on Cisco (CSCO). It would also give Oracle its own line of networking gear, fulfilling CEO Larry Ellison’s dream of offering customers complete systems as T.J. Watson’s IBM once did.

That said, there are issues with both scenarios. As Oppenheimer & Co. analyst Ittai Kidron explained in a research note this morning, an acquisition by Oracle would require the company to really commit to hardware as a long-term growth plan. “If the company truly plans to become a systems company (one-stop shop software/hardware), then Brocade would be a nice fit, especially including Sun Microsystems with no overlap,” Kidron said, adding, “we’re a bit in the dark on strategy here.”

And what of HP? That’s potentially far more problematic, what with equipment overlap and revenue implications. “Brocade would add the missing data center switch architecture as well as a strong presence in the SAN switch market,” Kidron explained. “That said, there would be massive overlap with HP’s ProCurve networking unit, which we believe would be disruptive. Also, IBM and EMC are 10% customers for Brocade and could be lost as customers (along with HP’s 10% business of Brocade).”

So will Brocade be tech’s next big buyout?