3Com shares up on hopes of Huawei, Bain deal
NEW YORK (Reuters) - Shares of 3Com Corp (COMS.O) rose over 20 percent on Friday on investor hopes it could revive a proposed $2.2 billion buyout by Bain Capital Partners and China's Huawei Technologies Co Ltd HWT.UL.
Private equity firm Bain Capital Partners and Huawei, China's top telecom equipment maker, withdrew their bid for 3Com earlier this month after failing to win approval from the Committee on Foreign Investment in the United States, which reviews deals between foreign buyers and U.S. companies.
Network equipment maker 3Com said late on Thursday it was continuing discussions with Bain. It said it would reconvene its shareholder meeting on March 7, which was adjourned early on Friday without taking a vote on the proposed deal.
Huawei and Bain are planning to resubmit their request for U.S. approval within the next several weeks, according to a Friday story in the Wall Street Journal.
The new transaction would still leave Huawei with 16.5 percent of the company and Bain holding the rest, said the Journal, citing people familiar with the matter.
3Com shares rose 59 cents, or 20.3 percent, to $3.50 in late Friday morning trade. The stock had dropped as low as $2.76 last week after 3Com had said it was withdrawing its CFIUS application.
3Com was a bright spot in an otherwise depressed U.S. telecom sector on Friday, after Sprint Nextel Corp (S.N) posted a quarterly loss of more than $29 billion.
A Huawei representative confirmed the company was still in discussions with 3Com and Bain. 3Com and Bain could not immediately be reached for comment.
Sprint shares were down 7.7 percent to $7.48. Motorola Inc (MOT.N), which makes network gear as well as cell phones, saw its shares fall 3.9 percent to $10. The S&P Index of U.S. telephone companies was down 2.6 percent.
(Reporting by Yinka Adegoke and Sinead Carew; Editing by Tim Dobbyn)
