3Com shareholders vote on Chinese takeover

   Date:2008/01/28     Source:

3COM Corp, the networking-equipment maker whose takeover by a Chinese company is under government scrutiny, said its shareholders will vote on the transaction on February 29.

The board is advising that investors vote in favor of the US$2.2-billion sale to Shenzhen-based Huawei Technologies Co and Bain Capital LLC, 3Com said in a regulatory filing. Shareholders who owned stock as of January 22 are eligible to vote, said Bloomberg News.

Law makers such as Arizona Senator Jon Kyl have urged the United States Treasury to examine the acquisition, arguing that putting 3Com's anti-hacking software in Chinese hands may threaten national security.

Huawei, founded by former army officer Ren Zhengfei 20 years ago, will get a 16.5-percent stake in 3Com.

The Massachusetts-based company hopes to complete the transaction by March 31, spokesman Kevin Flanagan said.

Bain and Huawei offered US$5.30 a share for 3Com in September. Charlyn Lusk, a spokeswoman for Boston-based Bain, declined to comment.

3Com rose 11 cents, or 2.7 percent, to US$4.19 on the Nasdaq Stock Market on Friday.


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