Feeds

US regulators eye HPCom trade surge

Pre-deal jump

Boost IT visibility and business value

A spike in 3Com options trading just hours before HP's $2.7bn cash takeover bid has caught the eye of US regulators, according to reports.

3Com's call trading surged to an astounding 26-month high on November 11 - four hours before the acquisition was disclosed after the market closed that day, Bloomberg said. Now the US Securities and Exchange Commission is looking into whether someone gleaned confidential information about the deal and illegally profited, the paper reports, citing an unnamed "person familiar with the matter."

Some stock watchers have been buzzing about a leaky HPCom deal based on the dubious jump in trading the evening the acquisition was first announced.

More than 8,000 3Com calls changed hands on November 11, which is 17 times the four-week average. Most were contracts conveying the right to purchase shares for $5 though the 20th, followed by December $5 calls, according to the WSJ.

HP proposed to buy 3Com at a price of $7.90 per share.

Also in the running to ankle HP's acquisition is a pair of shareholder lawsuits, filed in Delaware and Massachusetts, alleging the $2.7bn acquisition offer is an "unfair price."

The Delaware case, filed by New York attorney David Shaev on behalf of himself and 3Com shareholders, names the entire 3Com board of directors and accuses them of "attempting to deceive 3Com shareholders and unfairly deprive them of the true value of their investment in the company."

The Massachusetts case filed by Edward Tansey claims the 3Com board struck a deal "to meet their own personal objectives" rather than negotiate for the highest possible offer." It claims the deal is designed to "unlawfully divest" 3Com stockholders of their assets for a "grossly inadequate consideration."

Shareholder lawsuits demanding that a company hold out for more money are fairly common for any major acquisition, and nothing short of predictable in an enormous purchase like HP's offer for 3Com. ®

The Power of One Brief: Top reasons to choose HP BladeSystem

More from The Register

next story
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.