Dispute on H3C

H3C is the name of a JV formed by Huawei and 3Com in Nov. 2003, with respectively 49%/ 51% ownership. H3C had $170m in revenue and $18m in net profits, about half of 3Com figures. So, H3C is quite vital to 3Com, as other 3Com unit is loosing money. In the summer, 3Com tried to talk with Huawei on a possible buy out. Facing long and dificult negotiations, 3Com launched a bid process on the remaining 49%, last week. Under the shareholder agreement, insiders or outsiders can bid for part or all of the shares, but bidders only have 3 days to counter an offer. While apparently, no outside bidder is known, Huawei has made a higher counter-offer. Unless the parties mutually agree otherwise, this process continues until a bidder prevails. The auction is open and we will not wait too long to know the winner.