Hypercom Corp. this morning announced that its board of directors has unanimously rejected an unsolicited, nonbinding proposal from VeriFone Systems Inc. in which VeriFone in a Sept. 27 letter proposed to acquire all of Hypercom’s outstanding common shares for $5.25 per share in cash.
Hypercom’s board concluded that “the proposal significantly undervalues the company and its future prospects and is not in the best interests of stockholders,” the Scottsdale, Ariz.-based company said in a stated. “Hypercom believes that VeriFone's proposal is opportunistic and intended to disrupt its business, which has successfully taken market share from VeriFone in several markets.”
The board believes Hypercom “has proven its ability to grow profitably, has strong near- and long-term value creation potential and is well-positioned to increase profits and market share," Norman Stout, Hypercom chairman, said in the statement. "We are committed to representing the best interests of our stockholders and consistently have been open to exploring ways of enhancing value. However, we believe that VeriFone is not offering appropriate value to Hypercom stockholders, given our evident momentum in the marketplace and our excellent future prospects."
Douglas G. Bergeron, VeriFone's chief executive, said that he would pursue the acquisition even if Hypercom's board rejected the offer (see story). "We are committed and resolute to seeing this transaction through to a successful closing."