Several top executives, including CEO Greg Clark, have left the company in 2019. Picture: REUTERS
Several top executives, including CEO Greg Clark, have left the company in 2019. Picture: REUTERS

New York/Bengaluru — Cybersecurity company Symantec has walked away from negotiations to sell itself to chipmaker Broadcom over price disagreements, people familiar with the matter said on Monday.

Symantec’s decision raises new questions over the future of the US antivirus software provider, which is looking for a new CEO and has been struggling to grow its business serving companies.

It could not be determined why the price negotiations broke down. Broadcom was last week willing to offer as much as $28.25 a share in cash for Symantec and was hoping to ink a deal on Monday, one of the sources said.

CNBC, which first reported the news on Monday, said Symantec was looking for more than $28 a share.

It is possible that talks between the two sides will resume, the sources said. However, Symantec has a track record of exploring a sale, only to walk away from a deal.

Prior to reaching a deal with Starboard Value in 2018, which gave it representation on Symantec’s board, the California-based company explored going private, according to the sources.

Symantec also held talks in 2018 with private equity firm Thoma Bravo about a leveraged buyout, reports said at the time. Two other private equity firms, Silver Lake Partners and Bain Capital, are investors in Symantec and each have a seat on its board.

The sources asked not to be identified because the matter is confidential. Broadcom and Symantec did not respond to requests for comment.

Symantec’s shares fell 12% to $22.43 in Monday morning trading, giving it a market value of $14bn. Broadcom shares were up 2% at $291.32.

Symantec is struggling with severe competition from nimbler rivals. Several top executives, including CEO Greg Clark, have left the company in 2019, and it is also being investigated by US regulators over an accounting irregularity.

Symantec completed its $2.3bn acquisition of LifeLock in 2017, a move aimed at bolstering its consumer security business. That followed the purchase of Blue Coat for $4.65bn in 2016, which expanded its product line for large corporations.

Broadcom, whose chips power smartphones, computers and networking equipment, is trying to diversify into software after US President Donald Trump’s administration in 2018 scuttled its $117bn bid to buy mobile chipmaker Qualcomm.

The Symantec deal would have followed Broadcom’s $18.9bn acquisition of US business software company CA in 2018.

“Broadcom buys software companies — that’s their strategy. If this falls apart, they’ll buy something else at some point,” said Stacy Rasgon, an analyst with Bernstein.

Reuters