3Com chases Bain for $73 million break-up fee

3Com is looking for a US$66 million termination fee after Bain Capital and Huawei withdrew their bid to buy the company.

Networking vendor 3Com is attempting to secure a US$66 million (AU$73 million) payout from investment firm Bain Capital Partners, following Bain's withdrawal of its US$2.2 billion merger offer, according to The Associated Press.

Bain withdrew the offer last week, saying the Committee on Foreign Investment in the United States (CFIUS) was going to block the deal, which would have allotted a 16% share of 3Com to Chinese vendor Huawei Technologies.

3Com then voted to accept the offer — after it had been withdrawn. The company says Bain's reasons for withdrawing the agreement were not valid, therefore enabling 3Com to pursue Bain for the termination fee.

"3Com believes that the reasons cited in Bain Capital's press release are not grounds for termination of the agreement," a statement from 3Com read.

CFIUS is a US government department that has the authority to block the acquisitions of foreign companies by US organisations, if it feels they threaten US national security.

According to CRN, CFIUS was concerned that Huawei's ties to China's communist government could influence the products that 3Com provides to the US Department of Defense.

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