3Com seeks $66m breakup fee from failed Bain deal
3Com Corp. said that it intends to pursue a $66 million break-up fee after Bain Capital Partners LLC said yesterday that it has decided to give up on a deal to take 3Com private.
According to 3Com, a Marlborough networking company, the reasons that Bain cited yesterday for backing off the deal are "invalid" and "not grounds for termination."
3Com said it intends to move ahead with a shareholders meeting scheduled for this morning to enable its shareholder's to vote on the existing merger agreement.
Bain had planned to pay $2.2 billion to buy 3Com with the help of Huawei Technologies, a Chinese company with ties to the Chinese military.
Proposed in September, the deal would have given Huawei a 16 percent stake in 3Com, but the federal government's Committee on Foreign Investment in the United States expressed concerns that the transaction could harm US national security.
"Bain Capital made several alternative proposals to 3Com that we believe could have satisfied the concerns raised" by the committee, Bain said in a statement yesterday. "We regret that we were unable to agree upon an alternative transaction."
3Com said today it will continue to fulfill its obligations under the terms of the existing merger agreement while it pursues a $66 million termination fee payable under the terms of the agreement.
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(By Chris Reidy, Globe staff)
