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Network Associates gets 96% stake in McAfee

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CIOL Bureau
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SANTA CLARA: Computer security company Network Associates Inc. has announced that it completed an exchange offer with anti-virus software maker McAfee.com, signaling the close of a long-negotiated acquisition worth about $202 million. Network Associates, which in mid-August sweetened its bid for the 25 percent of McAfee.com it did not already own, said it now holds a 96 percent stake.



After the exchange offer ended at midnight EDT Thursday, McAfee stockholders had tendered a total of 10.39 million shares. The deal called for the exchange of 0.675 of a share of Network Associates and $8 in cash for each McAfee.com share. Based on Network Associates' Thursday closing price of $13.10 on the NYSE, the offer valued McAfee at about $16.84 a share, slightly below its Nasdaq closing price of $16.93.



Network Associates shares rose $1.08, or 8.2 percent, to $14.18 on Friday afternoon, while McAfee shares gained 3.6 percent, or 61 cents, to $17.54. The companies expect to complete the merger after the Nasdaq close on Friday, Network Associates said.



The McAfee shareholders who did not participate in the exchange would be subject to the same terms as the original offer, Network Associates said. Network Associates Chief Executive George Samenuk said in a statement that through the acquisition, the company would extend its services in the consumer, small- and home-office, and medium-sized business markets.



In a separate statement, the company named William Kerrigan as senior vice president of the new McAfee consumer division. Previously, Kerrigan was chief executive at Shaman Corp., and worked at Corporate Software North America and International Business Machines Corp. Srivats Sampath, chief executive at McAfee.com, has announced his intention to leave, according to Kerrigan and Kent Roberts, general counsel at Network Associates. "He views his work as done," Roberts said.



Kerrigan said the company did not know how many people performing similar functions within the two previously separate companies would be laid off, but said he expected it would be few.



Network Associates spun off McAfee.com, which sells its products over the Internet, in 1999. Network Associates also sells consumer products under the McAfee brand. Shareholders finally accepted Network Associates' first deal to include a cash payment, after three acquisition offers had already failed.



The company had to withdraw its first offer for McAfee in April after finding accounting problems that led it to restate results from 1998 through to 2000.



© Reuters

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