McAfee Rejects NAIs Second Advance Corp.'s board on Tuesday rejected an offer from its largest shareholder, security giant Network Associates Inc., to buy all of the company's outstanding shares. Corp.s board on Tuesday again rejected an offer from its largest shareholder, security giant Network Associates Inc., to buy all of the companys outstanding shares. This is the second time the company has refused NAIs advances.

A special committee of McAfee.coms board said NAIs offer of 0.90 shares of its stock for each share of stock "significantly undervalues the long-term value inherent in" One of the main factors in the committees decision was the strength of the companys business in relation to that of NAI, its former parent company.

"The special committee is highly confident in both the near-term and long-term prospects for as a standalone company," special committee member Frank Gill said in a statement.

Specifically, the committee cited "the significant decline in Network Associates business prospects due to the continuing decline in information technology spending for enterprise customers in contrast to the relative resilience of McAfee.coms subscription-based revenue model for the consumer and small business markets."

NAI, of Santa Clara, Calif., thrice 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 it disclosed 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 will result in a narrower profit for 1998 and larger losses for 1999 and 2000.

The 1998 net income will drop to $32.4 million from $36.4 million, the 1999 net loss will increase by $3 million to $159.9 million, and the 2000 net loss will swell by $21.2 million to $123.9 million.

NAI filed its restatement on June 28.

The board of, based in Sunnyvale, Calif., expressed concerns about the pending SEC investigation and also said that NAIs offer is "highly conditional, which results in significant uncertainty that the offer will be consummated."