Cheyenne Software is suing McAfee for alleged securities fraud in the latest spat between the two companies after take-over talks, initiated by McAfee, turned sour.
The slanging match erupted last Monday after McAfee's $1 billion takeover bid, submitted in private, was publicly rejected by Cheyenne as inadequate and unacceptable, to the apparent surprise of McAfee CEO William Larson.
According to the Wall Street Journal, Larson said he was floored to hear the rejection. In a conference call he accused Reijane Huai, Cheyenne CEO, of sabotaging friendly negotiations and called on the board of directors to exclude Huai from considering the bid.
Cheyenne responded by taking legal action. Huai slammed Larson for being irresponsible. 'Bill Larson has made numerous false and misleading public statements concerning Cheyenne and certain contacts between our companies.
Mr Larson is glib and obviously not accustomed to being held accountable for his public statements. It's time for truth, not nonsense,' he said. McAfee then rallied by claiming Cheyenne was using the lawsuit as a smokescreen to distract the public from the value of its friendly proposal. One source said: 'McAfee's frustrations are that Cheyenne is not even talking to it.'
The bid was made less than a month after Cheyenne's share price tumbled, following an announcement by the company that its Q3 results would not meet analysts' expectations.
Peter Watkins, VP international for McAfee, said: 'We are focused on network management and want to get there faster rather than later through this acquisition.'
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