Sourcefire Declines Barracuda Networks Offer

Sourcefire says Barracuda Networks' asking price is too low for shareholders.

Officials at Sourcefire turned down an unsolicited acquisition attempt by Barracuda Networks May 30, calling the bid too low.

Barracuda, which makes e-mail and Web security appliances, proposed to acquire all outstanding shares of common stock for $7.50 per share in cash, a 13 percent premium above the company's May 23 closing price. The price also represented a 34 percent premium over the enterprise value as of May 23, and 16 percent over the average trading stock price during the past 60 trading days.

In a press statement, Barracuda CEO Dean Drako said the acquisition would reflect his company's commitment to the open-source community.

"Sourcefire has made very powerful contributions to open-source efforts worldwide through its acquisition of ClamAV and its continued development of SNORT, the de facto Intrusion Detection and Prevention technology," he said in a prepared statement. "The combined company will be a more effective and profitable competitor with the ability to better meet the evolving demands of the market."

Sourcefire purchased ClamAV, an open-source antivirus project. At the time, Sourcefire officials said the purchase would help expand the company's open-source footprint and lay the foundation for new products and services across its enterprise threat management network security portfolio. Barracuda uses ClamAV in its security products and is embroiled in a patent dispute with Trend Micro over how the open-source software is implemented in Barracuda's products.

Sourcefire has struggled of late, posting a net loss in its first quarter 2008 earnings. News of the acquisition attempt raised Sourcefire stock to $7.55 mid-morning Friday.