3Com (COMS) Arbitrage Opportunity, Potentially Make 19%

3Com (Nasdaq: COMS) is being bought out by private equity shop, Bain Capital for $5.30 per share in cash. 3Com is currently trading at $4.43, thus if you bought 3Com today and the merger goes through you will earn a 19% gain on this trade or a 76% annualized gain.

On another note, 3Com is expected to continue its cooperative relationship with Accton Technology, the company's main production partner in Taiwan, following its acquisition by Bain in the first quarter of 2008.

With China-based Huawei Technologies also to become a major shareholder in 3Com after the acquisition, the new 3Com is expected to review its cooperation plan with Accton, stated the industry sources.

3Com is positive about the outlook for the network-equipment market in the Asia Pacific. Gigabit switch, network security and WLAN product lines are to grow 30-50%, 30% and 20%, respectively, in the region in 2008, Chai predicted.

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