An investigation on behalf of investors of Hypercom Corporation (NYSE:HYC) was initiated after Hypercom Corp announced it has agreed to be taken over by VeriFone Systems, Inc. The investigation concerns whether the offer and sale process are unfair to Hypercom investors and constitute breaches of fiduciary duties.

The investigation by a law firm concerns whether VeriFone Systems, Hypercom Corp. and certain of its officers and directors breached their fiduciary duties owed to Hypercom Corporation (NYSE:HYC) investors in connection with the proposed takeover.

Phoenix, Arizona based Hypercom Corporation and VeriFone Systems, Inc. announced on November 17, 2010 an agreement under which VeriFone Systems, Inc will acquire Hypercom Corp. in an all-stock transaction valued at approximately $485 million, including net debt assumed by VeriFone. Under the terms of the transaction Hypercom Corp shareholders will receive a fixed ratio of 0.23 shares of VeriFone common stock for each Hypercom (HYC) share they own, valued at approximately $7.32 per share based on the closing price on November 16, 2010.

Shares of Hypercom Corporation traded at roughly $6.60 per share after Hypercom reported on November 2, 2010 its third quarter results. In response to the takeover news HYC shares increased to $7.13 per share.

But the investigation by a law firm concerns whether the offer undervalues Hypercom Corporation and the sale process is unfair to the shareholders of Hypercom Corp (NYSE:HYC). As early as September 24, 2010, VeriFone made a previous offer to acquire all the outstanding shares of Hypercom Corp. for 0.21 shares of VeriFone followed by an all cash offer. Back on Sept 30 Hypercom rejected the offers saying that the offers significantly undervalued the company. Hypercom called VeriFone Sept.24's all-cash proposal ' is opportunistically timed to exploit our second quarter 2010 results, and claimed that the offer was 'intended to disrupt its business, which has successfully taken market share from VeriFone in several markets.' In addition the current the offer only offers also meager if any premium to HYC investors. Further Hypercoms 12 month total revenue went from $248.56million in 2006 to $406.90million in 2009. Hpyercom Corp reported for the first three quarters in 2010 $98.75million, $103.92million, and $125.10million in quarterly Total Revenue.

Therefore the investigation concerns whether the Hypercom Corp Board of Directors undertook an adequate and fair sales process to obtain fair consideration for all shareholders of Hypercom Corporation (NYSE:HYC) and breached their fiduciary duties to Hypercom (HYC) shareholder by failing to adequately shop the Company before entering into the transaction with VeriFone Systems.