SCOTTSDALE, Ariz. — Hypercom here, a provider of electronic payment terminals, today announced that its board of directors has received and unanimously rejected an unsolicited, non-binding proposal from VeriFone Systems, San Jose, Calif., another provider of payment terminals. The letter, which was received on September 27, proposed to acquire all of the outstanding common shares of the Company for $5.25 per share in cash.
Hypercom's Board concluded that VeriFone's proposal "significantly undervalues" the company and its future prospects and is not in the best interests of stockholders.
"Our Board firmly believes that 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," said Norman Stout, chairman of the Hypercom board, in a 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."
In the letter from VeriFone to Hypercom, Douglas G. Bergeron, VeriFone's chief executive officer, said, "Our proposal would deliver to your shareholders an immediate cash premium of 37% over your closing share price on September 23, 2010 and 52% over your 30-day trailing average closing price as of that date. This proposal is extremely attractive on every relevant financial metric. Consummation of the proposal would insulate your shareholders from the risk that Hypercom faces should it continue to experience disappointing financial and operating results in these challenging markets."