Hypercom Corp. has withdrawn its lawsuit filed Sept. 23 against VeriFone Systems Inc. over allegations of violating a confidentiality agreement. The Scottsdale, Ariz.-based terminal maker announced the withdrawal virtually seconds after PaymentsSource reported the lawsuit in a bulletin (see story).
“We filed a lawsuit to prevent VeriFone from making public any of the confidential financial projections we shared with VeriFone,” Norman Stout, chairman of the Hypercom board of directors, said in the announcement. “Despite a mutually agreed upon nondisclosure agreement, VeriFone made a series of public statements that we believe could be misconstrued by Hypercom’s stockholders. We therefore felt it necessary to withdraw our litigation in order to set the record straight.”
In a press release, Hypercom said over the past several years, San Jose, Calif.-based VeriFone has periodically approached the company “to explore whether long-term value could be generated for Hypercom and VeriFone stockholders through a business combination. While Hypercom is an increasingly strong, independent competitor in the global market, at VeriFone’s initiation [Hypercom] has engaged in numerous detailed, good-faith discussions with VeriFone in the belief that a combination at the right price could benefit its stockholders and, therefore, would warrant the board's full and concerted consideration.”
Stout went on to say: "As VeriFone is well aware based on confidential access to our nonpublic information, we are forecasting revenue and non-GAAP EPS which significantly exceed Wall Street securities analysts' consensus estimates for the third quarter. Hypercom's management team is focused on executing on our business plan and has developed excellent relationships with key customers around the world, successfully gaining market share in several important markets. It is disappointing that VeriFone has chosen to publicly announce an opportunistic unsolicited, nonbinding proposal to acquire Hypercom on unattractive terms."