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McAfee Fights Off Network Associates in Roll Up Bid
McAfee.com Corp. is trying to prevent Network Associates Inc.'s effort to roll up the subsidiary.
Network Associates on March 16 approached shareholders with an exchange offer to buy the 25% of shares it doesn't already own in McAfee for roughly $219 million in stock.
McAfee's special committee has asked shareholders to hold off on tendering shares to Network Associates, a Santa Clara, Calif.-based maker of anti-virus, network management and help-desk software.
A special committee was formed by the board of McAfee, which deemed the offer "financially inadequate".
Network Associates spun off McAfee in 1999, raising about $75 million. The company draws about 5% of its revenue from McAfee.
McAfee's closing share price Monday of $18.51 puts the deal value at $217.4 million.
Network Associates' offer values McAfee at $18.64 per share, a 20% premium to its $15.54 closing price on March 15. But McAfee's shares have risen by more than 23% since the offer, shrinking the premium to less than 1%.
In a prepared statement Monday, the committee said that the offer now represents a 24.9% discount from McAfee.com's trailing 90-day average closing price.
Under the law, the board of companies incorporated in Delaware that own at least 90% of each of the outstanding classes of a subsidiary's stock can close a merger without the approval of the target's board.
Analysts suggested the possibility that the deal might eventually be improved.
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