Rochester, New Hampshire-based Cabletron Systems Inc seems to be seeking to derail 3Com Corp’s plan to acquire Southborough, Massachusetts-based Chipcom Corp for $775m in shares, whcih works out at about $40 a share. Cabletron has filed with Federal Trade Commission seeking clearance to buy up to 50% of Chipcom’s shares, depending on market conditions, and the effect was to drive the Chipcom share price to $43.875. It is assumed that Cabletron does not really want to acquire Chipcom, which remains committed to marriage with 3Com, since the two companies’ product lines are directly competing, so that in putting the two together, one and one would make not much more than one. The main attraction of Chipcom to Cabletron would be its marketing and distribution presence in 30 countries and its OEM agreement with IBM Corp. If Cabletron is simply seeking to embarrass 3Com by forcing it to agree a higher price, 3Com could presumably get round that by offering shares worth say $70 a Chipcom share for 51% and control, and shares worth $10 a share for the balance, accepting shares pro rata for exchange from all that tendered.
