Prime Considers Offering Cash to Shareholders to Fend Off Bid

Prime Computer said it is considering a financial overhaul of the company and making a cash payment to its shareholders as a way of fending off MAI Basic Four’s hostile tender offer.

Joe Gavaghan, a spokesman for Prime, said the Natick, Mass., minicomputer maker could find another investor interested in acquiring a stake in the company, borrow money or sell off assets to come up with the one-time payment.

Prime’s board has made no decision about which option it prefers, Gavaghan said.

The company also said it is continuing discussions with others interested in acquiring the company. As a result of Tustin-based MAI’s recent decision to lower its offer for Prime, the Massachusetts firm is also “considering additional business and financial alternatives,” including the recapitalization plan, he said.

Separately Monday, MAI issued a statement saying it is “highly skeptical” that Prime is holding any meaningful discussions with third parties interested in acquiring the company.

MAI, a computer maker, launched a bid of $1.3 billion, or $20 a share, for Prime last November. The takeover bid has been stalled, in part, by various legal challenges thrown up by Prime.

After Prime challenged MAI to come up with the money for its offer, MAI lowered its bid last week to a combination of cash and securities that MAI values at $19.50 a share, but which analysts put at between $17 and $18.