Prime Computer Inc. on Wednesday sweetened its unsolicited offer for Computervision Corp. by $43.5 million, and took steps to invalidate its target's anti-takeover defenses.
Computervision, which rejected the first offer of $13.50 a share last week as inadequate, did not immediately respond to the second bid of $15 a share--which makes the offer worth $435 million. The company has 29 million shares outstanding.
A combination of the two Massachusetts-based computer companies would create one of the world's largest and fastest-growing suppliers of computer-aided design software.
Richard Eckel, spokesman for Prime, said the company would ask Computervision stockholders to remove their company's board of directors and replace them with directors nominated by Prime officials.
The new directors then could redeem Computervision's so-called poison pill rights, or the company's shareholder rights plan. If Prime purchases more than 20% of Computervision's stock, the plan goes into effect, automatically creating more shares and making the takeover attempt prohibitively expensive.
In a supplemental strategy, Prime also filed suit Wednesday in the Court of Chancery in Delaware, where Computervision is incorporated, to invalidate measures adopted by Computervision's board of directors Jan. 7, when the $13.50 offer was made.
Prime claims that the measures are unfairly designed to delay Prime's actions. Prime also filed a claim seeking to invalidate Computervision's shareholder rights plan.
Before the latest offer, Computervision officials had asked stockholders not to tender their shares to Prime, already the owner of 557,300 Computervision shares.
Instead, Computervision's management studied alternatives to Prime's first offer, including a merger between Computervision and another unspecified company.
Eckel said the sweetened offer stands until midnight Jan. 27. Since Tuesday, 1,698 shares of Computervision's common stock has been tendered and not withdrawn, Prime officials said.