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Network Associates tries again for McAfee.com

Network Associates tries again for McAfee.com

No doubt taking to heart the motto that if at first you don't succeed, try, try again, security software firm Network Associates (NAI) is trying for a third time to acquire the 25 per cent of McAfee.com that it does not already own.

McAfee.com, which offers managed security and antivirus services, is distinct from NAI's McAfee Security division.

Network Associates will offer 0.78 shares of NAI stock for each share of McAfee.com stock that it does not own, NAI said in statement. McAfee.com's board had approved a deal which would have merged the companies under those terms in April. That deal, however, was put on hold after the revelation of accounting irregularities forced NAI to restate its financial results for 1998, 1999 and 2000.

At the time, the company had been offering 0.78 shares of NAI stock for each outstanding share of McAfee.com. NAI had raised its offer from the 0.675 shares that it had originally offered after McAfee.com's board rejected that figure.

The day after the McAfee.com board's rejection of the initial bid, NAI put the deal on hold, citing a US Securities and Exchange Commission (SEC) investigation into the company. However, just three days later, NAI was again pursuing the buyout.

NAI's board decided to recommence the buyout attempt on Sunday, according to Kent Roberts, NAI executive vice president and chief counsel. The company had filed its restated financial results on Friday and was able to proceed now that it had accurate financial information on record, he said.

If the deal goes through, which Roberts expects it will, the new NAI will have "a coordinated offering into the consumer and small-to-medium (sized company) business. The customers in that space will be very pleased with that result," Roberts said.

Merging the two companies will increase the firm's focus, cut down on operational overhead and reduce brand confusion, Roberts said.

NAI expects to file its tender offer with the SEC on Tuesday, he said. Given a Tuesday filing, the tender offer could be accepted as early as July 30, Roberts said.

If the deal is struck at that date, NAI would perform a "short form merger" in which it would acquire the remaining 10 per cent of McAfee.com, Roberts said.


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