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Bain Capital offers concessions on $2.2B 3Com buyout deal to clear US national security review

Bain Capital offers concessions on $2.2B 3Com buyout deal to clear US national security review

Bain Capital Partners disclosed it has offered the U.S. government several concessions to get national security approval for a proposed $2.2 billion buyout of 3Com Corp.
"We have put on the table robust mitigation proposals that offer significant structural and security safeguards to American national security interests," Bain Capital, a private equity firm, said in a statement Tuesday to the Associated Press.
According to a source familiar with the matter who is not authorized to speak publicly about the deal, one of the proposals under active discussion among the companies and the government is the divestment of Tipping Point, a unit of 3Com, which makes network security software.
The proposed acquisition in September of 3Com, a network equipment maker, set off alarm bells in Washington. Lawmakers and the administration expressed concerns that sensitive military technology could be transferred to China via a 16.5 percent stake held by Huawei, a Shenzen-based telecommunications company with strong ties to the Chinese government.
Bain requested a national security review with the Committee on Foreign Investment in the United States, a 12-agency group with the authority to recommend the White House block or alter terms of deals that involve national security.
Marlborough, Massachusetts-based 3Com's shareholders are scheduled to meet on Feb. 29 to vote on Boston-based Bain's offer.
Shares of 3Com soared from $3.22 a share to $5.11 apiece in the weeks following Boston-based Bain's offer. Since then it has slid and ended trading Tuesday at $3.81 a share.


Updated : 2021-10-23 19:22 GMT+08:00