The French point of sale terminal company Ingenico SA on Thursday withdrew its offer to buy its U.S. rival Hypercom Corp., after the latter's decision to carry out its deal to buy another company.
Ingenico and Hypercom sparred publicly all week over whether Ingenico's offer would interfere with Hypercom's plan to buy the e-Transactions unit of Thales SA in Neuilly-sur-Seine, France. Hypercom said it wanted to complete the deal, and it faced a Wednesday deadline to affirm its intention or lose a $10 million deposit.
Norman Stout, Hypercom's chairman, said in a press release Wednesday that his company had decided to execute the Thales purchase after negotiations with Ingenico hit a wall on that point.
"It became clear there was no path acceptable to the parties to pursue a transaction between Hypercom and Ingenico at this time," he said. "Accordingly, our board determined to move forward with the e-Transactions purchase."
During a conference call Monday, Philippe Lazare, Ingenico's chief executive, stressed that his company was "not interested in buying the combination of Hypercom and Thales."
Ingenico offered on Feb. 5 to buy Hypercom for $6.25 a share, a premium of about 52% over its stock price before the offer. The news drove the share price above $5 Monday, but the price slipped Thursday after Ingenico said it was abandoning its bid. Thursday afternoon, Hypercom shares were trading down 14.34% from Wednesday's close, at $4.18.
Hypercom said it expects to close the Thales deal by March 31.
In a press release Monday, Hypercom, of Phoenix, questioned Ingenico's motives for making its bid, saying that the French company might be trying to use the offer to disrupt the Thales deal. Hypercom asked Ingenico to put up a deposit to indemnify the Arizona company against the possibility that it might fail to meet its Wednesday deadline, but Ingenico balked.
Last month, before offering to buy Hypercom, Ingenico sued Francisco Partners II LP, the private-equity company that has agreed to fund the Thales deal, demanding that Francisco withdraw its funding.
Ingenico said in its Thursday press release: "We learned only last Tuesday that, under the terms of Hypercom's agreement with Thales, they were not free to enter into a transaction with us that does not include the Thales assets. Under the circumstances created by Hypercom's agreement with Thales, we simply do not see any way to proceed."
