VeriFone attempts hostile takeover of competitor Hypercom for $290 million in cashBy AP
Wednesday, September 29, 2010
VeriFone makes hostile takeover bid for Hypercom
SAN JOSE, Calif. — Electronic-payment provider VeriFone Systems Inc. is attempting a hostile takeover of competitor Hypercom Corp., which VeriFone said Wednesday it offered to buy for $5.25 per share in cash.
Based on the number of outstanding shares indicated in Hypercom’s most recent quarterly report, a deal would be worth about $290 million.
VeriFone said it sent a letter to Hypercom’s board on Monday that proposed paying $5.25 per share in cash for the company.
Scottsdale, Ariz.-based Hypercom’s shares soared in after-hours trading, jumping $1.90, or 44.9 percent, to $6.13. The stock had finished trading up 6 cents at $4.23.
In its letter, VeriFone said its current offer comes in response to Hypercom’s rejection of a stock-for-stock offer it made on Friday to buy Hypercom’s outstanding shares at a 0.21 exchange ratio. VeriFone said that offer was a premium of 52 percent over its closing price of $3.84 on Sept. 23.
VeriFone said its latest offer is a 37 percent premium — in cash — over the Sept. 23 close.
It also said that it prefers to work with Hypercom’s board to arrive at a deal, but that due to Hypercom’s initial rejection and the possibility that rumors could “distort” that company’s shares it was publicizing its offer so it could be judged by Hypercom shareholders.
Hypercom spokesman Pete Schuddekopf had no comment regarding VeriFone’s offer, but said Hypercom’s board was preparing a response.
Tags: California, North America, Ownership Changes, San Jose, United States