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McAfee accepts higher bid from Network Associates

McAfee accepts higher bid from Network Associates

McAfee.com Wednesday accepted a sweetened offer from Network Associates to buy the remaining shares of the antivirus software company that it doesn't already own.

Network Associates, which spun off McAfee.com in December 1999, holds about a 75 per cent stake in the company.

The security software vendor said in a statement that a special committee of McAfee.com approved the deal when its financial adviser determined the price was "adequate."

Under the new offer, McAfee.com shareholders will be offered 0.78 of a share of Network Associates stock for each outstanding share of McAfee.com stock. Network Associates said the amended exchange rate is a 15.6 percent increase over the original exchange rate of 0.675.

Based on the midday share price of Network Associates' stock, the new terms of the deal would value each McAfee.com share at $US17.23. McAfee.com stock was trading at $US17.18 late Wednesday in the US..

Kent Roberts, Network Associates' executive vice president and general counsel, said the strengths of the two companies complemented each other and the best way to showcase those strengths to customers was to bring the two entities under one management.

Roberts said he didn't think the US Securities and Exchange Commission's investigation into Network Associates' accounting practices in 2000 would interfere with the deal.

Chris Christiansen, an analyst at IDC said Network Associates' CEO George Samenuk wanted to pull McAfee.com back in as part of consolidation efforts that began shortly after he started working at Network Associates early last year.

McAfee.com also announced two software-related deals today. First, the company announced that it had acquired "SpamKiller" antispam software and that the software's developer, Thor Ivar Elke, would join the company. The company will add SpamKiller to its line of managed security services starting in its second quarter, the company said.

Additionally, McAfee.com said it had signed agreements with a pair of cable Internet access providers to offer its security services to their subscribers. Comcast Cable Communications and RoadRunner, the online service of Time Warner Cable, will both offer McAfee.com's managed firewall, antivirus and other security services to their subscribers. Broadband connections have become an increasingly appealing target to attackers in the past year, as they offer large amounts of bandwidth and often employ little security.

Sam Costello of the IDG News Service contributed to this report.


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