16% of Prime Shares Tendered to MAI Are Withdrawn
A significant number of Prime Computer Inc. shareholders have withdrawn stock previously tendered to MAI Basic Four Inc. under its $970-million takeover bid.
MAI, a Tustin-based computer maker, reported Thursday that 27.7 million Prime shares, or 61%, had been tendered under its $20-per-share offer, as of Feb. 15. That represents a 16% reduction from the 33 million shares tendered as of Jan. 30, MAI said.
MAI spokesman Peter Rosenthal attributed the decline in shares tendered to “unsubstantiated rumors” about a third-party bid.
Prime’s stock rose above the $20 bid 2 weeks ago on speculation that a “white knight” bid may be made for the Natick, Mass., minicomputer maker. Since then, however, the stock has dipped below $20.
Prime’s shares closed Thursday at $19.625, down 12.5 cents, in New York Stock Exchange trading.
Robert Johnson, an analyst with the investment firm Rotan Mosle Inc. in Houston, said some takeover stock specialists known as arbitrageurs may have withdrawn their shares because of legal delays and other problems that are stalling the MAI bid.
“The arbs are very time-sensitive and they want to be in on the latest hot deals,” Johnson said. “This one is just taking too long.”
Prime has fended off MAI since the takeover bid was made in November, adopting “poison pill” defenses and waging court battles.
Despite the decline in tendered shares, analysts said MAI still has the upper hand in the 3-month-old takeover struggle.
MAI “still has a very substantial number of shares,” said William Milton, an analyst at Brown Brothers Harriman & Co., a New York brokerage.
Analysts have said Prime must soon find a white knight--a company willing to acquire it on friendlier terms--if it hopes to avoid an MAI takeover.
Meanwhile, MAI and Prime continue to wage their takeover battle in courts in Massachusetts and Delaware.
A federal judge in Boston has continued an injunction barring MAI from proceeding with its offer, saying that he is not satisfied with financial disclosures made by MAI and its financial adviser, Drexel Burnham Lambert. A hearing on MAI’s appeal of the ruling has been scheduled for March 2.
MAI is also challenging Prime’s poison-pill anti-takeover plans in chancery court in Delaware, where Prime is incorporated. MAI has said it will not go forward with its plan unless the plans are invalidated. The Delaware court has delayed hearing MAI’s appeal pending the outcome of the Massachusetts case.
MAI has extended its offer to March 8.
United Press International contributed to this report.
