Consultants from Ernst & Young examining Cisco's $3 billion offer to acquire Tandberg have found Cisco's bid to be fair.

The price has been challenged by a group of Tandberg stockholders representing about a quarter of the Norwegian firm's shareholders, but the Ernst & Young report, commissioned by Tandberg management, counters the dissident stockholders.

"It is of our opinion that the terms of the offer are fair from a financial point of view, so far as the shareholders of Tandberg (are) concerned," the report stated. Tandberg's directors have supported the Cisco bid and Cisco has maintained that its offer is fair. So far, the acquisition has been held up because Norwegian regulations require that 90% of stockholders approve of acquisitions like Cisco's bid for Tandberg.

Reacting to the Ernst & Young report Monday, Cisco's Ned Hooper, senior VP and chief strategy officer, said the bid reflects not only the potential value of the acquisition, but also the risks inherent in integrating a European public company into Cisco. In Cisco's blog, Cooper said, "The bottom line is that Cisco will always act with fiscal prudence."

The dissident shareholders maintain the bid is too low and want Cisco to raise its bid. Alternately, another suitor for the video conferencing company could emerge or, the stockholders claim, Tandberg could continue to thrive on its own.

The game of acquisition chicken is continuing as rumors have surfaced in recent days that Cisco is considering walking away from the deal. Investment banking analysts have suggested that Polycom, another videoconferencing company, might be an alternative acquisition target for Cisco.

Cisco will release its third-quarter financial report later this week and the issue is certain to be aired then.

Cisco has been on an acquisition tear and has moved to acquire Starent Networks, a maker of mobile infrastructure gear, for $2.9 billion in recent days.

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