French eftpos outfit Ingenico has made an unsolicited all-cash bid to acquire rival US e-payments firm Hypercom for around $332 million, but the deal is contingent on the Arizona-based vendor dropping a proposal to acquire a card payments business from Thales.
Ingenico says it made the bid in a letter dated Tuesday 5 February.
The $6.25 per share offer represents a premium of 52% to Hypercom's share price on that day and a 58% premium to Hypercom's closing share price of $3.95 on Friday.
However Ingenico says the deal is contingent on Hypercom ditching plans to buy Thales' e-transactions business division for $120 million, plus an additional performance related earn-out of up to $30 million.
Hypercom said it had obtained a $60 million financing commitment from US private equity fund Francisco Partners for the Thales deal when disclosing details of the proposed takeover in December.
But in January, Ingenico said it was suing Francisco Partners for allegedly breaking a non-disclosure agreement of Hypercom's proposed acquisition.
In a statement released on 22 January 2008, The French vendor says it has filed legal proceedings against Francisco Partners for "using Ingenico confidential information" and breaching the terms of a non-disclosure agreement, dated 21 March 2006 between Ingenico and Francisco Partners.
The breaches arise from Francisco's proposed provision of a $60 million senior credit facility to Hypercom Corporation relating to the acquisition of Thales' e-transactions business, says Ingenico.
In a statement accompanying the bid letter, Ingenico CEO Philippe Lazare says Hypercom has been "uncooperative with regards to a reasonable path forward", but makes it clear that Ingenico in "not interested in proceeding if Hypercom consummates its proposed acquisition of Thales".
In the letter, Lazare says that Ingenico would be prepared to discuss the sharing of costs which Hypercom could incur if the Thales bid was ditched.
"We understand that your agreement with Thales gives you the right, consistent with your Board's fiduciary duties, to pursue a transaction with us," says the letter.
In response to the release of Ingenico's letter, Hypercom chairman, Norman Stout, issued a statement saying that discussions with Ingenico have been opened to determine the French firm's "ability to promptly make a credible, firm and fully financed offer, with certainty of closing, as well as to determine the complete terms of their proposal".
But Stout insists that Hypercom will move forward with the intended acquisition of the Thales unit "which we believe has a high certainty of closing and will generate significant shareholder value".