3Com vote on Bain takeover is set for Friday

3Com Corp. of Marlborough said today that it plans to proceed with its currently scheduled meeting on Friday so shareholders can vote on its pending takeover.

The board continues to recommend that shareholders vote in favor of the proposed $2.2 billion buyout by Bain Capital Partners LLC of Boston and China's Huawei Technologies Co. Under terms of the deal, 3Com shareholders would receive $5.30 in cash per share, and 3Com would become a private company.

The networking equipment company had postponed the shareholder vote in order to address lawmakers' national security concerns over the deal.

3Com and affiliates of Bain Capital and Huawei made a joint voluntary filing with the Committee on Foreign Investment in the United States, but the parties have since withdrawn the filing as they were not able to reach an agreement with the committee.

No application has been resubmitted, and the parties have been unable to agree on an alternative transaction that addresses the committee's concerns and is acceptable to 3Com's board.

At the time of the application withdrawal, the parties assured the committee that they would not proceed with the original proposed transaction, which included a minority investment by Huawei affiliates.

Therefore, there can be no assurance that the parties will be able to close the current deal, even if 3Com shareholders vote in favor of it, the company said.

Huawei has strong ties to the Chinese government, and lawmakers and Bush administration officials have expressed concerns that sensitive military technology could be transferred to China through the 16.5 percent 3Com stake that would be held by Huawei under the deal's original terms.

3Com shares lost 37 cents, or 12.9 percent, at $2.49 in morning trading on the Nasdaq Stock Market. (AP)