3Com to Vote on Bain's $2.2B Bid
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Who has the last say in an acquisition: the U.S. government or the shareholders of a company? It's something that networking vendor 3Com is going to find out.
The company has scheduled a shareholder meeting vote for tomorrow at 8 a.m ET to vote on the proposed $2.2 billion dollar bid by Bain Capital Partners.
The deal also involves China-based networking vendor Huawei Technologies taking a 16 percent stake in 3Com. It's the Huawei stake that has been the subject of substantial debate with the U.S. government's Committee on Foreign Investment in the United States (CFIUS). CFIUS approval is required for the deal to be completed.
3Com and Bain have tried to alleviate CFIUS's concerns but to date have been unable to do so. In fact, 3Com has withdrawn its filing with the CFIUS as 3Com and Bain figure out how to appease CFIUS's concerns regarding Chinese ownership of 3Com.
"While we remain committed to exploring alternatives that would enable us to complete the merger transaction contemplated by our existing merger agreement, we also remain confident in our long-term prospects," said Edgar Masri, 3Com's president and CEO, in a statement. "The company and our strategy, which attracted Bain Capital to 3Com in the first place, have not changed."
That said, 3Com and Bain noted in a press release about the upcoming shareholder vote that even if shareholders approve the merger, it's not a guarantee that the deal will be completed.
"There can be no assurance that the parties will reach agreement on an alternative transaction that both addresses concerns raised by CFIUS and is acceptable to 3Com," 3Com's press release stated.