Network Associates withdraws offer to acquire McAfee

SANTA CLARA: Computer security provider Network Associates Inc. said Thursday

it withdrew its offer to acquire McAfee.com Corp. and it may have to restate its

financial results for 1999 and 2000 after finding accounting inaccuracies.

Network Associates, whose accounting practices are under investigation by the

Securities and Exchange Commission, said it is conducting an internal

investigation to determine the scope and magnitude of the accounting problems.

The company said it does not believe that its results for 2001 or the first

quarter of 2002 require restatement. It said it informed the staff of the SEC of

its investigation and will keep the regulators posted on its progress.

In light of the anticipated restatement, Network Associates said it withdrew

its offer for anti-virus services company McAfee.com, which was scheduled to

expire at midnight Thursday.

Earlier this month, McAfee.com accepted a sweetened bid of $224 million from

Network Associates for the 25 percent stake it does not already own.