Prime Seeks Bids to Beat MAI’s Offer

Prime Computer, trying to fend off a hostile takeover bid from MAI Basic Four, announced Tuesday that it is seeking buyout proposals from investors willing to pay more than MAI has offered for the company.

Ever since the bitter takeover battle began in November, Prime has contended that the offer from Tustin-based MAI, which amounts to $1.3 billion or $20 a share, is too low. But Tuesday’s announcement that Prime has directed its financial advisers to actively negotiate with potential buyers marked the first time that the Natick, Mass., company has publicly stated that it is open to friendly offers.

New York investor Bennett S. LeBow, chairman of MAI, said in a statement that MAI will continue to pursue its tender offer.

“We enthusiastically endorse their proposal if they intend to sell Prime to the highest bidder,” LeBow said. “However, if this is another one of Prime’s delaying tactics, we intend to vigorously oppose it.”

Shares of Prime closed at $19.875, up $1.875, on the New York Stock Exchange, and shares of MAI rose to $8.75, up 87.5 cents.

Analysts labeled Prime’s move as a stall tactic aimed at buying time for Prime to find another bidder or coax MAI to increase its offer. In its announcement, Prime said it rescheduled its annual meeting from May 12 to June 14 to provide more time for negotiations to sell the company. The move also delays the anticipated shareholder vote on a proposal by MAI to replace Prime’s board with a new set of directors.

That delay, some analysts said, could hurt MAI’s chances.

Jeff Bagner, an attorney for MAI, said the company is skeptical about Prime’s motives for seeking a buyer.

Prime spokesman Joe Gavaghan said the company asked for bidders now because the upcoming proxy fight on the makeup of the company’s board will take place before the end of the second quarter, when Prime expects to show the results of cost-cutting measures taken last year.