3Com Corp. investors dropped a lawsuit in which they sought more cash in a $2.2 billion bid for the company two months after LLC and Huawei Technologies Co. withdrew their offer, reports Bloomberg News.

Shareholders sued 3Com in September saying the offer of $5.30 a share was ''grossly inadequate.'' The stock has been trading at about $2.50 a share this week. Delaware Chancery Court Judge Stephen Lamb signed the dismissal order yesterday.

Investors tentatively agreed to settle the lawsuit in February through mailing of a proxy supplement ''in anticipation of the shareholder vote,'' according to court papers. Boston- based Bain walked away in March and shareholders voted in favor of the deal so 3Com could seek a $66 million breakup fee from Bain and Huawei.

The buyout was opposed by the federal government's Committee on Foreign Investment in the U.S. because the combination would have given China-based Huawei part of 3Com, Bain said.

Bain dropped the plan over concerns the Chinese government would have access to some 3Com anti-hacking technology used by the U.S. Defense Department.

Source:stockhouse