McAfee.com Finally Says OK to Network Associates

After five months, one withdrawn bid, and three upped offers, Network
Associates appears set to acquire the 22 percent of
McAfee.com it does not already own. Today, a special
committee of McAfee.com’s board of directors voted to recommend shareholders
accept Network Associates’ latest re-jiggered offer.

Two weeks ago, Santa Clara, Calif.-based Network Associates upped its offer
for the Sunnyvale, Calif.-based McAfee.com shares it didn’t already own to
$8 in cash and .675 of a Network Associates stock. Based on yesterday’s
closing price, the deal would be worth $17.86, up 81 percent from the offer
originally tendered in March
, based on Network Associates’ Wednesday
closing price.

“The special committee is pleased that Network Associates has presented an
offer we are able to recommend to our stockholders,” Frank Gill, a special
committee member, 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.”

Gill, along with McAfee.com CEO and President Srivats Sampath, had criticized
Network Associates’ earlier offers
as severely undervaluing the company.
Just a month ago, Gill expressed confidence that McAfee.com would do better
as a standalone company.

In the end, the gamesmanship paid off, as Network Associates bumped up the
purchase price and included approximately $96 million cash in the offer.
With Network Associates’ stock price down 43 percent since the offer was
made, the cash greatly sweetened the deal.

As this process comes to a close we will continue our relentless focus on
execution, now for stockholders of both companies,” said Sampath. “I am
delighted that all stockholders will be able to benefit from the upside
potential of this combination.”

McAfee.com’s special committee noted concern about the ongoing
Securities and Exchange Commission investigation of Network Associates’
accounting practices
. However, it concluded that deal would allow
McAfee.com shareholders to sell their stock, if they were sufficiently
concerned that the investigation could turn up wrongdoing.

Network Associates’ CEO George Samenuk and CFO Stephen Richards submitted
the SEC’s required certification that the company’s financial reports were
complete and accurate.

McAfee.com’s anti-virus products are key to Network Associates’ future
plans. Network Associates announced
in October 2001
that it would sell off its PGP encryption and Gauntlet
firewall product lines, in order to concentrate on three business areas:
anti-virus software; network and application management; and Web-based
service desk software. Secure Computing Corp. purchased Gauntlet for an
undisclosed sum in February. Earlier this week, Network Associates sold its
wireless and desktop PGP product lines
to a newly formed startup, PGP
Corp.

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