3Com holds meeting as planned despite Bain's termination of merger agreement

By Lisa Kerner

Charlotte, N.C., March 24 - 3Com Corp. stockholders, at a special meeting held Friday, voted to adopt the Sept. 28 agreement and plan of merger by and among the company and Bain Capital Partners, LLC affiliates Diamond II Holdings, Inc. and Diamond II Acquisition Corp., according to a form 8-K filing with the Securities and Exchange Commission.

As previously reported, holding the meeting and the vote allows 3Com to fulfill its commitments under the agreement and preserves 3Com's right to pursue a break-up fee under certain circumstances.

On Thursday, a Bain Capital affiliate said it was terminating the merger agreement because the U.S. Government's Committee on Foreign Investment in the United States planned to take action that would prohibit the transaction.

In response to Bain Capital's announcement, 3Com said it did not believe the move was valid, arguing that the reasons cited by Bain Capital are not grounds for termination of the agreement. The company also said it will seek payment of the $66 million termination fee.

In September, 3Com agreed to be acquired by affiliates of the Boston investment firm for $2.2 billion.

The companies' agreement called for 3Com shareholders to receive $5.30 in cash per share in a deal to take the company private. Affiliates of Huawei Technologies Co. Ltd. were to acquire a minority interest in 3Com and become a commercial and strategic partner of 3Com, according to a prior 3Com news release.

3Com, located in Marlborough, Mass., provides secure, converged voice and data networking solutions.

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