The French point of sale terminal vendor Ingenico SA has challenged the terms of a confidentiality agreement proposed by Hypercom Corp., the Phoenix company Ingenico is trying to buy.
On Monday afternoon Ingenico made public a letter it had written to Hypercom's chairman, Norman Stout, criticizing his company for not accepting the buyout terms Ingenico proposed last week.
Hypercom has asked that Ingenico pay a $15 million deposit to indemnify Hypercom over the state of its proposed acquisition of a Thales SA unit. Ingenico sued Francisco Partners II LP, the private-equity firm funding the Thales transaction, last month for allegedly breaching a confidentiality agreement between Francisco Partners and Ingenico.
Earlier Monday, Mr. Stout had said in a press release that he did not want any negotiations with Ingenico to interfere with the Thales transaction. Before Ingenico issued its letter, Philippe Lazare, its chief executive, said on a conference call that his company was interested in buying only Hypercom, not the Thales unit.
Hypercom made public Monday its own letter to Mr. Lazare.
"Your insistence on behaving as if this were a hostile overture and playing this out in the public arena causes us to question your motivations," Mr. Stout wrote in the letter. He defended the deposit request by citing Ingenico's earlier attempt to stop the Thales deal by interfering with its funding.
If Hypercom does not sign a stock purchase agreement by late Wednesday, it risks losing the $10 million deposit it paid Thales, he wrote. The company fears losing the Thales deal "and then having Ingenico not acquire the company," he wrote. Without the proposed confidentiality agreement, Ingenico, can walk away from the Hypercom talks without any cost "and the benefit of having prevented Hypercom from becoming a formidable competitor."
