Network Associates plans to acquire all publicly held shares in Sunnyvale, California-based McAfee.com through a stock swap in a bid to merge the antivirus-software vendor with one of its subsidiaries, Network Associates said Monday. The offer is expected to be formally filed with the U.S. Securities and Exchange commission on or about March 25, it said.
Under terms of the deal, McAfee.com shareholders will be offered 0.675 shares of Network Associates common stock for each outstanding share of McAfee.com Class A common stock, Network Associates said in a statement. The Santa Clara, California-based network security company currently owns approximately 75 percent of antivirus-software vendor McAfee.com, it said.
Based on the March 15 closing price of US$27.61 per share for Network Associates and $15.54 per share for McAfee.com, the offer represents a value of almost $18.64, or a premium of almost 20 percent, per McAfee.com share, according to a company statement.
In a statement, McAfee.com officials acknowledged the Networks Associate proposal, noting that Network Associates intended to put the proposal directly to McAfee.com shareholders for approval rather than the company's board of directors.
In light of the proposal, McAfee.com's board of directors has assembled a special committee of independent and outside directors to determine the company's options and make recommendations to the board of directors. Within 10 business days of the commencement of Network Associates' exchange offer, McAfee.com's board expects to make public its recommendation to shareholders whether to accept or reject the proposal. The board may also decide to stay neutral, the McAfee.com statement said.
So far, the board has not reached a decision on the matter, it said.
Network Associates said the deal would cause a $0.01 decline in the 2002 pro forma earnings per share (EPS) for the consolidated entity. The decline in EPS would be caused by the issuance of approximately 8 million shares necessary to complete this transaction, the company said.