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The pending acquisition of Marlborough-based 3Com Corp. by Hewlett Packard Co. has prompted an insider trading investigation by the U.S. Securities and Exchange Commission, according to online reports.
The acquisition deal, announced just last week, calls for 3Com to be bought for $2.7 billion in cash by the California-based computer giant. According to a report by Bloomberg, the options call trading for 3Com soared just before the announcement, at one time reaching 17 times its average from the previous four weeks. That marked a 26-month high in trading activity, the site reports.
According to Bloomberg, the SEC often monitors options call trading as a strong indicator of potential insider trading activity.
The HP acquisition is expected to close in the first half of calendar 2010, HP and 3Com officials said last week. Also on the docket for 3Com are two couple of class action lawsuits, one in Delaware and one in Massachusetts, calling the planned $2.7 billion for the company an “unfair price,” according to website PE Hub. The suit filed in the Bay State has as a plaintiff 3Com shareholder Edward Tansey of Maine.
3Com officials were not available for comment.
3Com, which has 5,800 employees globally, posted revenue of $290.5 million and $7.5 million in net profit in the third quarter, a year-over-year drop of 15 percent and 91 percent respectively. It held $200 million in long-term debt, including $46 million due this fiscal year and another $46 million due in its 2011 fiscal year. The company has a market cap of $2.23 billion.
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