Network Associates bid 'inadequate,' says McAfee

The special committee of the board of directors of McAfee.com regards the buyout bid made by Santa Clara, California-based Network Associates last week as financially inadequate, the company said in a statement Monday.

Network Associates already owns 75 percent of Sunnyvale, California-based McAfee.com and wants to buy the outstanding stock in order to turn the antivirus-software vendor into a wholly owned subsidiary.

The special committee said that the exchange ratio of 0.675 Network Associates shares for one McAfee.com share represents almost a 25 percent discount from McAfee.com's most recent 90-day average closing price, and thus significantly undervalues the long-term value of McAfee.com as a stand-alone company.

McAfee also objected to a clause in the buyout documents which gives Network Associates the ability to terminate an offer based on a change in prospects of Network Associates or McAfee.com. McAfee would also not have sufficient opportunity to conduct due diligence investigations on Network Associates, which would be necessary to protect its other shareholders, the company said in the statement.

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