Claiming an inability to stifle US government concerns over a 3Com acquisition, Bain Capital Partners and Huawei Technologies are now taking their ball and going home.

The private equity firm and its Chinese partner late Thursday pulled out of a joint $2.2bn bid to acquire 3Com. Bain said despite its best efforts to restructure the deal, it was notified that the Committee on Foreign Investment in the United States (CFIUS) would block the buyout.

"Bain Capital made several alternative proposals to 3Com that we believe could have satisfied the concerns raised by CFIUS," said Bain. "We regret that we were unable to agree on an alternative transaction."

US feds were not terribly sweet on Huawei taking a small minority stake in 3Com, whose TippingPoint unit sells intrusion prevention technology to the US government. Concerns were further stoked by Huawei's founder Ren Zhengfei past as former Chinese army officer. Several US lawmakers said the deal was a threat to national security.

3Com said that Bain's excuse for aborting the deal is not valid and will pursue a $66m termination fee payable under the merger agreement.

"3Com acknowledges that Bain Capital did submit non-binding confidential proposals to the 3Com board of Directors," said the company in a statement, "however the Board determined that such proposals were not in the best interest of shareholders."

To collect the $66m, 3Com shareholders voted today to approve the now-defunct deal. 3Com said in a filing with the US Securities and Exchange Commission (SEC) that nearly 70 per cent of its shareholders voted in favor of the acquisition.

"We don't believe the deal is terminated," said a 3Com spokesman, John Vincenzo. "We are going to continue to operate as the agreement stands."

Translation: $66m consolation prize? Yes please! ®