Hypercom rejects second bid from VeriFone and says offer is attempt to disrupt business

Hypercom rejects hostile bid from VeriFone

SCOTTSDALE, Ariz. — Hypercom Corp. has rejected an unsolicited takeover bid from rival electronic-payment provider VeriFone, saying Thursday that the offer was much too low.

Hypercom’s shares surged $1.93, or 46 percent, to $6.16 in morning trading as a result. Earlier, the stock hit a 52-week high of $6.25.

VeriFone is offering $5.25 per share in cash. Based on the number of outstanding shares in Hypercom’s most recent quarterly report, a deal would be worth about $290 million.

Hypercom rejected a stock-swap offer last week, and VeriFone Systems Inc. answered with the new cash bid. But Hypercom charged VeriFone with trying to disrupt its business after it had taken market share from the company.

Bolstering its claims Thursday, Hypercom said it expects to “significantly” exceed Wall Street revenue expectations for the third quarter. Analysts polled by Thomson Reuters currently expect revenue of $112.6 million.

Wedbush Morgan analyst Gil B. Luria raised his target price on Hypercom to $6 from $5 and called VeriFone’s offer too low. He also thinks another bidder could come forward.

“Hypercom shareholders will not settle for an offer less than $6.00 (per) share in cash, and are less likely to accept a stock offer,” the analyst wrote in a note to investors. “Especially since we believe even an offer as high as $8 (per) share could still be accretive for VeriFone.”

Even so, he added that Hypercom’s board is in “a weakened position to withstand a meaningfully sweetened offer given the regrets around the rejected offer from Ingenico at $6.25 in 2008.”

Verifone shares rose $1.55, or 5.3 percent, to $30.60 in morning trading.