McAfee committee okays Network Associates bid

SUNNYVALE: McAfee.com Corp. said on Friday its special board committee has recommended shareholders accept security provider Network Associates Inc.'s sweetened offer to buy the remaining 25 percent of McAfee shares it does not own.

"The special committee is pleased that Network Associates has presented an offer we are able to recommend to our stockholders," Frank Gill, a member of the two-person committee, said in a statement.

"McAfee.com's stockholders can now receive what we believe is a fair value for their holdings and benefit from the strategic advantages of the recombined companies," he said.

The offer, valued at $17.86 per share, represents an 81 percent increase over Network Associates' original offer valued of $9.86 made in March 2002. Those values are based on Network Associates' closing price of $14.60 per share Wednesday.

In early morning trading Friday, shares of Network Associates fell 60 cents, or 4 percent, to $14.90 on the New York Stock Exchange. Shares of McAfee were off 58 cents, or 3 percent, to $17.82 on the Nasdaq stock market.

Under the deal, McAfee shareholders would receive $8 in cash and 0.675 of a Network Associates share for each of their shares. McAfee had its financial and legal advisors review the new pact. Santa Clara, California-based Network Associates, which already owns 75 percent of McAfee, sweetened its offer for the company on Aug. 13 after a previous offer of 0.9 of a share was rejected.

McAfee Chief Executive Officer Srivats Sampath, who spurned the terms of the original offer, said he was "delighted that all stockholders will be able to benefit from the upside potential of this combination."

Network Associates withdrew its first offer in April, after finding accounting problems that led it to restate results for 1998 through 2000 and an investigation by the Securities and Exchange Commission.

Despite the investigation, the special committee recommended the new offer after Network Associates executives certified the accuracy of the company's financial statements under new federal requirements.

(C) Reuters Ltd.