McAfee.com Corp. on Monday said a special committee of its board of directors rejected Network Associates Inc.s plans to buy back the McAfee.com shares it doesnt already own because the "offer would be financially inadequate."
The company, which was formerly a wholly owned division of Network Associates, said that its former parent companys proposal undervalues McAfee.coms long-term potential and that the suggested 0.675 share-exchange ratio represents a severe discount of the companys recent closing prices. McAfee.com executives also said that "the Network Associates proposal is opportunistically timed."
Network Associates, based in Santa Clara, Calif., last week announced its intention to repurchase the 25 percent of McAfee.com that it doesnt own. Under the terms of the deal, McAfee.com shareholders would receive 0.675 shares of NAI stock for each share of McAfee.com that they own.
NAIs proposal values McAfee.com at $17.88 per share using Fridays closing price for NAI. McAfee.com closed at $19.48 Friday.
NAI spun out McAfee.com, based in Sunnyvale, Calif., in 1999, at the height of the Internet boom, a time when the security giant was in the middle of an effort to decentralize its operations. It also turned out another dot-com, MyCIO.com, which it eventually brought back into the corporate fold in 2001.
NAI is currently in the process of trying to reintegrate its various divisions into one lean, cohesive company. The re-acquisition of McAfee.com is an important piece of that plan and an outright rejection of the buyback could be a major stumbling block to its completion.