Network Associates extends McAfee.com offer

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Network Associates extends McAfee.com offer

McAfee.com shareholders have heeded management's recommendation and overwhelmingly rejected security software developer Network Associates' latest share offer.

Undaunted, Network Associates has extended the time frame for McAfee.com shareholders to take advantage of the offer until mid-August, through which Network Associates hopes to purchase the remaining 25% of McAfee.com.

The offer had been set to expire at midnight on Tuesday. Only 4% of eligible McAfee.com's shares were tendered into the offer, the companies said.

For the deal to go through, Network Associates must either receive a majority of votes or increase its McAfee.com stake from 75% to 90%. Those shares tendered are enough to increase Network Associates' stake in McAfee.com to only 76%, Network Associates said.

Earlier this month, McAfee.com's directors urged shareholders to reject Network Associates' offer, saying that at the price offered, McAfee.com would be significantly undervalued and better off operating independently.

Following Tuesday's voting results, McAfee.com chief executive officer Srivats Sampath called for Network Associates to increase its offer or withdraw the bid.

Network Associates has increased its bid for McAfee.com several times, most recently after it revealed that accounting irregularities would require the company to restate its financial reports for 1998 through 2000.

Network Associates' share price dwindled throughout July, while McAfee.com shares have stayed steadier.

McAfee.com originated as a part of NAI, and was spun out as a separate company in 1999. Network Associates hopes to reabsorb the subscription services and hosted applications provider to strengthen its own offerings for the consumer and small-to-medium business market, and to cut down on customer confusion about the distinction between McAfee.com and Network Associates' McAfee Security product group.

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