Secure rejects CyberGuard offer
San Jose-based Secure Computing Corp. says its board has rejected an all-stock takeover offer from rival CyberGuard Corp., a network security firm based in Ft. Lauderdale, Fla. The one-for-one, all-stock deal would be worth about $277.5 million based on CyberGuard's closing share price of $7.80 on July 9. Thursday's announcement from Secure followed reports that CyberGuard has told the Securities and Exchange Commission that revenue for its first quarter ending Sept. 30 is likely to be about $15.7 million, slightly under an earlier forecast of $15.9 million, and that earnings will be in the range of 1 cent to 4 cents per share. Thomson First Call has said a consensus of analysts was expecting CyberGuard would hit 6 cents per share. "After consultation with Citigroup, its financial advisor, and Heller Ehrman White & McAuliffe LLP, its legal advisor, the board of directors of Secure Computing unanimously rejected the unsolicited proposal," Secure says in a statement. "Secure Computing's board believes that the proposal is not in the best interests of its stockholders," the statement says. "We are disappointed in the initial response by the board of directors to our offer. We remain absolutely convinced that the extraordinary economic synergies that could result from combining these two companies would most certainly be in the best interest of our combined employees, customers and shareholders," says Pat Clawson, chairman and chief executive officer of CyberGuard, in a written statement. "Moreover, we believe that we have a high probability of raising cash that would make this transaction more compelling to the Secure Computing shareholders." Secure makes firewall information security products as well as authentication and Web filtering products. In its announcement Monday that it wanted to acquire Secure, CyberGuard claimed the deal would generate more than $14 million in savings or an incremental 20 cents a share in earnings. CyberGuard said that, based on the July 9 closing price of the companies' stocks, its offer represented a 22 percent premium to the value of each share of Secure Computing common stock
Reproduced from an article published by Silicon Valley Business Journal
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