Wednesday, September 24, 2008

3Com plans $100M stock buyback

By Mass High Tech Staff

Enterprise networking company 3Com Corp. will buy back up to $100 million of its own stock over the next year, under a plan approved by the Marlborough-based company’s board of directors.

Company officials say that the plan approves both repurchases through open-market and privately negotiated deals as management feels it is needed. Any repurchased shares will be retired to 3Com’s authorized but unissued shares.

In early August, 3Com (Nasdaq: COMS) sued Bain Capital Partners LLC for a $66 million termination fee, according to a 3Com filing with the U.S. Securities and Exchange Commission.

The Boston-based private equity firm pulled out of a buyout deal in March with Huawei Technologies Co. Ltd., the Chinese partner of 3Com, to buy 3Com for $2.2 billion. The deal would have resulted in Huawei taking a minority stake in the company, with Bain Capital holding the bulk of the ownership through its Diamond II Holdings entity, with shareholders receiving $5.30 per share.

In July, 3Com won a final court judgment over in its patent suit against Realtek Semiconductor Corp. which called for Realtek to pay 3Com $70 million to cover patent infringement charges.

For 2008, 3Com reported a loss of $228 million on revenue of $1.3 billion.