May 18, 2010 / 6:52 PM / 9 years ago

UPDATE 2-Symantec close to buying VeriSign unit -- source

* Symantec to pay $1.3 bln — source

* VeriSign, Symantec decline comment

* VeriSign CFO pulls out of JPMorgan investor conference

* VeriSign shares up 5.2 pct; Symantec down 2 pct

(Adds Symantec close to buying VeriSign security unit)

By Jim Finkle and Megan Davies

SAN FRANCISCO/NEW YORK, May 18 (Reuters) - Symantec Corp (SYMC.O) is close to acquiring VeriSign Inc’s (VRSN.O) widely used technology for securing payments over the Internet as part of a deal worth $1.3 billion, said a person familiar with the matter.

The person was not authorized to publicly discuss the effort. The two companies declined comment.

A deal would give Symantec, already the world’s biggest maker of security software, VeriSign’s Internet security business, including its crown jewel — the SSL technology for electronic payments and other Internet transactions.

Sale of the unit would leave VeriSign in one main business — managing more than 100 million Internet domain names, including those ending in .com and .net. Over the past three years, it has sold off or shut down nearly 20 business units to focus on its high-margin Internet domain business.

“The next step might be to sell the rest of the company,” said Jefferies & Co analyst Katherine Egbert. “Why not go all the way? Is this a natural progression?”

VeriSign’s non-Internet domain businesses accounted for about $410 million of its $1 billion in sales last year.

VeriSign shares rose earlier on Tuesday on speculation the company could be up for sale after chief financial officer Brian Robins unexpectedly canceled plans to speak at a JPMorgan investment conference.

A source with knowledge of the matter said VeriSign recently approached some companies about buying its security business, best known for its secure socket layer, or SSL, technology that encrypts financial transactions over the Internet. A certificate on a website’s server authenticates the identity of that site to the user, then sets up a scrambled connection to prevent outsiders from stealing sensitive data.

VeriSign shares rose further after the Wall Street Journal reported Symantec was close to a deal for the business and the stock ended up 5.2 percent at $28.23 on Nasdaq. Symantec shares fell 2.03 percent to $15.95.

VeriSign spokesman Brad Williams said Robins canceled the JPMorgan conference because of a last-minute schedule change, but declined to elaborate. When asked if Robins was working to sell the company or its security business, Williams declined comment. (Reporting by Jim Finkle and Megan Davies; additional reporting by Doris Frankel; editing by Tiffany Wu and Steve Orlofsky)

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