McAfee Accepts NAI Acquisition Offer

By Dennis Fisher  |  Posted 2002-08-23 Print this article Print

After months of refusing advances from its former parent company, McAfee finally accepts NAI's acquisition offer.

After months of refusing Network Associates Inc.s advances, Corp. on Friday finally accepted its former parent companys acquisition offer. For each share of stock, Network Associates, of Santa Clara, Calif., will pay $8 in cash and 0.675 of a share of its stock. This is the fourth time that NAI has offered to repurchase the remaining 25 percent of, a business which was once a division of NAI. rejected the companys original offer, which was based on an exchange ratio of 0.675 shares of NAI stock for every share of NAI then raised its offer to 0.78 shares, but later withdrew its bid after disclosing that the Securities and Exchange Commission was investigating NAIs accounting practices.
NAI then began its own internal investigation and eventually said that it would restate three years of financials, which resulted in a narrower profit for 1998 and larger losses for 1999 and 2000.
Net income for 1998 dropped to $32.4 million from $36.4 million, net loss for 1999 increased by $3 million to $159.9 million, and net loss for 2000 swelled by $21.2 million to $123.9 million. NAI filed its restatement on June 28. In making its decision to accept NAIs latest offer, McAfee.coms board said that the SEC investigation did raise some uncertainty, but the fact that CEO George Samenuk and CFO Stephen Richards recently certified the veracity of the companys financial results helped outweigh any doubts. "I am delighted that all stockholders will be able to benefit from the upside potential of this combination," said Srivats Sampath, CEO of, based in Sunnyvale, Calif.

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