Tech Firm’s Sale To McAfee Called Unfair

     LOS ANGELES (CN) – Secure Computing shareholders say the company is selling itself too cheaply to McAfee – for $465 million, or $5.75 per share. The class action plaintiffs say Secure shares sold for $8 in March and the recent fall to $4.52 reflects the unstable financial market, not an internal company problem.

     Shareholders claim that Secure, McAfee and co-buyer Seabiscuit Acquisition Corp. agreed to unnecessary provisions that short-circuited a fair sale process. Because of a “no shop” agreement, Secure’s Board of Directors was unable to look for competing offers, the complaint states.
     The agreement also insists on a “standstill” provision that keeps Secure directors from even discussing alternative sale plans. And the agreement includes a $16 million termination fee, which shareholders say make it all but impossible to look for a fair offer.
     Secure provides an Internet host reputation system, which estimates the security of emails and Web connections, among other things.
     Shareholders ask the Superior Court to enjoin the sale. If the sale is completed, the shareholders want damages, costs and attorney fees. They are represented by David Bower with Harrington Foxx Dubrow Canter.

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