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Doubting Bain's 3Com Excuse |
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| Mar 21, 2008 04:50 PM UTC |
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Tracked Blogger
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3/20 - "It wasn’t a huge surprise to learn Thursday that private equity firm Bain Capital is bailing on its plan to acquire 3Com Corporation (COMS)...The deal had to be reviewed by the Committee on Foreign Investment in the United States (CFIUS), and Bain cited the group’s opposition in a press release as the reason for backing out of the deal." "So did CFIUS actually kill the deal? The Bain press release says “CFIUS made clear that it intended to take action to prohibit the proposed transaction.” But I can’t find any statement from them to that effect...One of the big advantages that private equity shops are supposed to have is stellar risk management. Is it plausible that Bain’s high-charged analysts were unable to anticipate government opposition, and factor that into their takeover plan?" "I don’t buy it. I think what happened is: In the months since this deal was announced, 3Com’s business - like that of many technology firms - has shown serious signs of weakness, and is simply not worth the amount originally offered." 
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3Com Added to Watch List
3/20 - "Bain Capital made it official and took the $2.2 billion buyout offer off the table, too bad now that 3Com is only worth $796 million. So is 3Com worthless for investors?...Despite the (negative) net income, another buyer may just put 3Com out of business, it's possible now that shares are under $2."
"The companies might (still) win approval for the deal if Bain sold 3Com's TippingPo...
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3Com Will Seek Breakup Fee From Bain
3/21 - "Rebuffed in its attempt to merge with Bain Capital Partners, 3Com (NSDQ: COMS) said it will "pursue" the private equity firm to collect a $66 million break up fee as the networking company prepared to convene a stockholders meeting Friday."
"3Com, pointing out that it needs shareholder approval of the original merger agreement to seek the termination fee, said it would go ahead with ...
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