NAI presses ahead with bid

Network Associates Inc. is moving ahead with its offer to buy out the remaining shares in its Corp. subsidiary despite earlier indications the company might put its bid on hold.

Network Associates (NAI) has officially commenced its bid to acquire public shares in, the company said in a statement released Friday. The offer, which was originally expected to commence on or about March 25, will expire at 12 a.m. ET (4 a.m. GMT) on April 20, according to Network Associates Chief Financial Officer and Chief Operations Officer Stephen Richards.

On Monday, Network Associates announced it would put off its bid to acquire for an unspecified length of time after its offer was rejected as insufficient by's board of directors. On Tuesday, Network Associates revealed that it was the subject of an investigation by the U.S. Securities and Exchange Commission into its accounting practices during 2000. Network Associates and its auditor, PricewaterhouseCoopers LLP, have maintained that accounting for the company's 2000 financial results was conducted properly.

Under terms of the proposed acquisition deal announced earlier this month, shareholders will be offered 0.675 shares of Network Associates common stock for each outstanding share of Class A common stock. The Santa Clara, California, security software company currently owns approximately 75 percent of antivirus-software vendor AI postponed the start of the bid from the 25th because it wanted to wait until the news of the SEC investigation had been released, Richards said.

"We felt it wouldn't be prudent to launch the tender on schedule" because of the investigation, he said.

The announcement that NAI will continue with the bid doesn't signal anything about the status of the SEC investigation, Richards added.

Despite the statement from's board, Richards said NAI is "feeling confident of success." Network Associates' offer is to shareholders, he said, not the board alone and shareholders will receive better value from owning NAI stock. did not respond to requests for comment. has 10 business days from Friday to file a form with the SEC stating whether it favors, is neutral to, or is not in favor of the deal, Richards said. shareholders have until April 25 to make their decision, he said. The terms of the deal set forth by NAI will require that shareholders of 90 percent of the outstanding shares approve the deal for the acquisition to go through, he said.

Based on the March 15 closing price of US$27.61 per share for Network Associates and $15.54 per share for, the offer represents a value of almost $18.64, or a premium of almost 20 percent, per share, according to Network Associates.

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