Network Associates Renews Bid for McAfee

April 2, 2002 -- (WEB HOST INDUSTRY REVIEW) -- Network Associates Inc., a computer security provider, renewed its contested plan to buy the rest of anti-virus software company McAfee.com Corporation, Reuters reported.

The company, which spun off the McAfeee brand three years ago, but still owns approximately 75 percent, renewed its bid on Friday, a few days after delaying the offer and disclosing that the Securities and Exchange Commission was investigating its accounting practices for fiscal 2000.

Network Associates says the delay was designed to let the market know about the investigation before going ahead with the offer, and that it has no clear idea of when the SEC will commence or conclude its questioning.

Commencing on Friday, the offer is due to expire at midnight April 25. It would give McAfee.com shareholders 0.675 shares of Network Associates common stock for each outstanding Class A McAfee share. Network Associates says McAfee has 10 business days to file its position with the SEC. If the tender offer and merger are completed, McAfee.com would become a wholly owned subsidiary of Network Associates and its shares would cease trading publicly.

McAfee responded in a statement, saying it would make a recommendation to its shareholders on the offer by April 11, and suggested that shareholders take no action until then.

McAfee rejected Network Associates’ original March 16 bid, which it called financially inadequate. Network Associates stood by its offer, valued at about $209.4 million based on Network Associates’ closing price of $24.20 on Thursday.

Network Associates says it believes the SEC probe, which it disclosed on March 26, is focused on the company’s 2000 accounting practice of booking revenues when products were shipped to distributors rather than when customers bought them. The company announced a change to that practice in December 2000.