CyberGuard Makes $297M Bid For Secure Computing

CyberGuard, Fort Lauderdale, Fla., sent its offer to Secure on Sunday, a week after Secure said it would miss its second-quarter earnings targets.

Based on Friday closing stock prices, CyberGuard's offer of a 1-for-1 stock swap represents a 22 percent premium for shareholders of Secure, which is based in San Jose, Calif.

News of the deal sent shares of Secure surging 92 cents, or 14 percent, to $7.30 Monday morning on the Nasdaq Stock Market.

CyberGuard shares fell 41 cents, or 5.3 percent, to $7.39.

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Secure, which focuses on firewalls, authentication and Web filtering, was one of several software companies that reported trouble closing deals in June, prompting fears of a broader technology-industry slowdown.

Hostile takeovers are rare in the software industry.

CyberGuard and Secure have had informal talks in the last 18 months, but no deal was put on the table, according to The Wall Street Journal.

CyberGuard Chairman and Chief Executive Pat Clawson said the transaction could save $14 million, increasing earnings by 20 cents a share.

For the quarter ended March 31, Secure had net income of $2.2 million, or 6 cents a share, on revenue of $21.2 million. CyberGuard posted a loss of $2.1 million, or 9 cents a share, on revenue of $13.04 million.

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