McAfee.com's board of directors determined Wednesday that Network Associates's (NAI) new offer to buy the company is adequate and has recommended that its shareholders approve the proposed buyout of the company.
The announcement comes after NAI increased its bid on its subsidiary earlier on Wednesday. McAfee.com Corp.'s board was scheduled to recommend action on the proposed merger with parent company NAI on Thursday. McAfee.com Chief Executive Officer (CEO) Srivats Sampath, NAI CEO George Samenuk and NAI Chief Financial Officer Stephen Richards sit on the McAfee.com board but were not involved in the board's decision because each owns stock in both companies.
McAfee.com also announced the purchase of antispam software from a developer and a set of deals with broadband Internet access providers which will see McAfee.com offer its security services to those providers' customers.
NAI, based in Santa Clara, California, increased its offer for McAfee.com to 0.78 shares of NAI stock for each outstanding share of McAfee.com stock. The original offer had 0.675 shares of NAI being exchanged for each share of McAfee.com. Network Associates already owns 75 percent of McAfee.com. The amended offer was announced in a joint press release issued by both companies Wednesday.
McAfee.com had termed Network Associates' original offer "inadequate" in late March. A day later, Network Associates put the deal on hold after announcing that its accounting practices are under investigation by the U.S. Securities and Exchange Commission, only to resume its bid on March 29.
Based on the midday share price of Network Associates' stock (NYSE: NET), the new terms of the deal would value each McAfee.com share at US$17.23 each. McAfee.com stock (Nasdaq: MCAF) was trading at $17.02 midday Wednesday.
McAfee.com declined immediate comment on the news, citing the release of its quarterly financial results set for later in the day Wednesday.
Network Associates, on the other hand, sees the announcement of the recommendation as "great news," in the words of Kent Roberts, NAI executive vice president and general counsel.
The new offer came as a result of negotiations with McAfee.com's board in an attempt to find a mutually-agreeable figure, he said. Roberts expects that McAfee.com's shareholders will be pleased with the new offer and will vote to approve the buyout on April 25, the date set for that vote.
"We think (the deal) will be very positive," Roberts said. "We want a coordinated approach to the consumer market."
Though details of exactly how McAfee.com will be integrated into NAI are yet to be determined, McAfee.com will continue to offer its suite of managed service to consumers and small businesses, he said.