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Bain Capital LLC's $2.2 billion deal for 3Com Corp. (COMS) may be the latest buyout to hit the skids.

The Marlborough, Mass.-based networking equipment maker said in a statement Wednesday that it and its prospective buyers have withdrawn their filing seeking approval from the U.S. agency that vets deals for national security concerns. 3Com, which agreed to sell out to Boston-based Bain and minority investor Huawei Technologies Co. Ltd. of China, said the group is committed to continuing discussions.

3Com agreed in late September to the deal, which would give Bain an 83.5% stake and the balance to Huawei, a Shenzhen, China-based private telecommunications equipment and systems supplier. It is Huawei's connection to the Chinese government that is at the root of concern among lawmakers and defense and intelligence officials.

The $5.30 per share offer in September represented a premium of nearly 44% over the shares' $3.68 closing price before the announcement. After closing down 6.52% Tuesday at $3.73, 3Com shares slid to a low of $2.99 Wednesday morning.

The group had voluntarily submitted its petition Oct. 4 to the Committee on Foreign Investment in the United States, or CFIUS, the intergovernmental panel that reviews deals for their impact on national security.

Under terms of the deal, Huawei would be afforded three spots on the new 3Com board and could raise its stake to 21.5%, but without taking additional seats.

Bain two weeks ago acknowledged that it had offered concessions on the deal, saying in a statement it had put on the table "robust mitigation proposals that offer significant structural and security safeguards to American national security interests." It did not offer further details.

Sparking some concern is a 2003 Huawei-3Com joint venture, H3C Technologies Co. Ltd., formed to produce routers and switches to meet demand in China. The JV elevated 3Com's status to a major player in China's technology market. In March, 3Com bought out Huawei's 49% stake in H3C, paying $882 million to take full ownership.

Ahead of the petition withdrawal announced Wednesday, it was thought CFIUS officials might seek to have Bain deny Huawei access to some 3Com technologies or require the company to conduct its U.S. government contracting business through a division overseen by a board of U.S. citizens with security expertise.

While private equity buyouts have been falling apart lately because of the credit crunch and regretful buyers, the 3Com deal's problems are more reminiscent of the 2005 Dubai ports fiasco. DP World was elevated to a household name when CFIUS approved the Dubai state-owned ports group's acquisition of operations at six key U.S. ports, to much public outcry. The uproar moved DP World to sell the operations to American investors. -- Carolyn Murphy

Source: Nat'l Security Concerns Torpedo 3Com Buyout