3Com sues Bain unit for $66m breakup fee

WILMINGTON, Del. - 3Com Corp., the money-losing maker of computer-networking equipment, sued a unit of Bain Capital LLC seeking a $66 million breakup fee from a failed takeover bid.

In March, Boston-based Bain and a Chinese partner, Huawei Technologies Co., walked away from a deal to buy 3Com for $2.2 billion after failing to allay US government security concerns about the combination. Diamond II Holdings Inc., created by Bain for the takeover, owes $66 million under the terms of the merger agreement, 3Com said in a complaint filed yesterday in Delaware Chancery Court in Wilmington.

"3Com now seeks the benefit of the bargain that was struck, and to require Bain Capital's Newco to live up to its commitments in the merger agreement by paying the termination fee," lawyers for Marlborough-based 3Com said.

Charlyn Lusk, a spokeswoman for Bain, declined to comment on the suit.