Antivirus firm McAfee.com has rejected a $211m buyout offer from parent company Network Associates on the basis that it is not enough.
A committee report on behalf of the board of directors and Morgan Stanley, which is advising the company, referred to Network Associates' offer to acquire every outstanding Class A McAfee share for 0.675 of Network Associates stock as "financially inadequate".
The committee also said that the offer was "opportunistically timed", and undervalued McAfee.com's long-term potential because it was only worth $210.7m on Friday, down from the original offer of $220m on 16 March due to a stock price drop.
Under the terms of the deal, Network Associates would buy back the 25 per cent of McAfee it does not already own. The company spun off McAfee.com in 1999 during the dotcom boom for about $75m.
As Network Associates is currently in the process of turning its various divisions into a single lean, mean, fighting machine the rejection of the buyback offer could throw a spanner in the works.
McAfee.com is currently recommending that shareholders do not make a decision on a tender offer until the committee makes a recommendation later today.
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