SCUR Spurns CyberGuard Suitor

Secure Computing Corp. (Nasdaq: SCUR) has turned down CyberGuard Corp.'s (Nasdaq: CGFW) $300 million acquisition proposal, but it doesn't look as if the security firm is ready to take no for an answer.

In a statement released this morning, Secure Computing announced that its board unanimously rejected CyberGuards unsolicited offer, after consulting with financial advisor Citigroup and legal advisor Heller Ehrman White & McAuliffe. The proposal “is not in the best interests of its stockholders," Secure Computing directors said.

In a letter sent to Secure Computing last weekend, CyberGuard proposed a one-for-one stock exchange transaction, a deal that was worth about $300 million at Friday’s closing price of CyberGuard shares (see CyberGuard Locks Onto SCUR).

But it looks as if CyberGuard is now prepared to up the ante. In a response to Secure Computing's statement, CyberGuard CEO Pat Clawson said, "We believe that we have a high probability of raising cash that would make this transaction more compelling to the Secure Computing shareholders...

"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."