Networking vendor 3Com has demanded $66 million from private equity firm Bain Capital towards merger break-up fee.

3Com was set to be sold to Bain Capital Partners under a US$2.2 billion agreement signed in October 2007.

Bain Capital had back out from the deal late last week. Reason behind stepping out from the deal was that the U.S. government’s Committee on Foreign Investment in the United States (CFIUS) was intent on scuttling the deal citing national security concerns.

Bain claims it pursued all avenues to see the merger go ahead, but felt it could not get the agreement approved by CFIUS.

3Com responded with a statement saying that it “does not believe that Bain Capital Partners’ attempt to terminate its merger agreement with 3Com is valid”.

“3Com believes that the reasons cited in Bain Capital’s press release are not grounds for termination of the agreement,” the company said.