Rebuffed in its attempt to merge with Bain Capital Partners, 3Com said it will "pursue" the private equity firm to collect a $66 million break up fee as the networking company prepared to convene a stockholders meeting Friday.

The three-way merger deal, which called for China's Huawei Technologies to become a 16% partner in a new Bain company, was scuttled Thursday by Bain. The financial firm said it ended the proposed deal because "the U.S. Government's Committee on Foreign Investment in the United States (CFIUS) said it intended to take action to prohibit" the transaction.

3Com, pointing out that it needs shareholder approval of the original merger agreement to seek the termination fee, said it would go ahead with the meeting at its Massachusetts headquarters.

3Com said it believes Bain's reasons for terminating the merger agreement are not valid. "3Com acknowledges that Bain Capital did submit non-binding confidential proposals to the 3Com board of Directors, however the Board determined that such proposals were not in the best interest of shareholders," the company said.

At the heart of the controversy is the role of CFIUS, the government agency that reviewed the investment, particularly whether foreign ownership of a piece of 3Com and its Tipping Point security systems unit posed any threat to U.S. national security. 3Com was prepared to sell off the unit if the deal went through, according to media reports. Opponents of the merger noted that Huawei's leadership included former Chinese military officials.

A spokeswoman for Bain said the private equity company would have no comment beyond its brief press release in which it said it was terminating the merger agreement with 3Com. "Bain Capital made several alternative proposals to 3Com that we believe could have satisfied the concerns raised by CFIUS," Bain stated in the release. "We regret that we were unable to agree upon an alternative transaction."

3Com has said it will continue its business in the U.S. with Huawei. 3Com has also had a growing business in China.

Last month, the case had attracted comment from the Chinese government. In dismissing U.S. complaints that the deal could compromise U.S. national security, Liu Jianchao, Chinese foreign ministry spokesman, said: "This was a normal business investment in accordance with market rules. It was an investment decision made in accordance with [Huawei's] own development," according to a report in the Financial Times.