TECHNOLOGY : Meeting of Prime and MAI Heightens Buyout Tension
MAI Basic Four and Prime Computer may be giving new meaning to the term “unfriendly takeover.”
Officials of the two companies met face-to-face Wednesday for the first time in their bitter seven-month-old takeover battle, but the meeting seemed to do little to ease the bad blood between the two rival computer makers.
Early Thursday morning, MAI issued a news release accusing Prime Chairman David Dunn of showing “no interest in negotiating a business combination of Prime and MAI.”
Prime, a Natick, Mass., minicomputer manufacturer, responded with a strongly worded statement of its own. The company said it was “shocked and totally surprised at the intentionally misleading news release MAI issued this morning regarding the meeting.”
Not to be outdone, MAI fired off another testy statement. In comments attributed to an unidentified MAI spokesman, the Tustin computer company said: “It is time for Prime to end all of the rhetoric and personal attacks. We do not intend to engage in such conduct. Rhetoric and personal attacks are poor substitutes for providing value to shareholders.”
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MAI Chairman Bennett S. LeBow, a New York investor, had requested the Wednesday meeting with Dunn. His company has been trying to gain control of much-larger Prime since last November. MAI’s latest offer of cash and securities values Prime at about $1.3 billion, or about $19.50 per share.
Analysts said the latest round of rhetorical skirmishes seems to be an attempt by both companies to gain the upper hand as the takeover battle draws to a close.
“In hostile deals, there is a lot of posturing like this,” said Lawrence Garshofsky, vice president of Kayne, Anderson & Co., a Los Angeles securities firm that specializes in takeover stocks. “Both sides are trying to come off looking the best to (Prime’s) shareholders and make the other guy seem like the bad guy.”
Thursday’s battle of the news releases was not the first time the MAI-Prime fight has become personal.
Earlier in the takeover battle, Prime’s public relations department was busy telling the story of how MAI’s LeBow and a business partner, William Weksel, who together own 43% of MAI, had been named defendants in shareholder lawsuits related to a small New York computer company that went bankrupt in 1984.
MAI struck back in a federal court lawsuit in which it charged that an investment firm headed by Prime’s Dunn had purchased nearly $1 million of Prime stock shortly before MAI formally launched its bid. MAI claimed that Dunn had purchased the stock with knowledge that MAI was interested in pursing a merger with Prime. Dunn acknowledged the stock purchase but denied any wrongdoing.
Meanwhile, despite months of effort, Prime has not been able to find a friendly bidder for the company as an alternative to MAI, though the firm said it is still talking to several interested parties. Prime also says it still is willing to talk to MAI, even if things did not go so well Thursday.
“The folks here felt that there was a very cordial meeting where some bridges were being built, and then the MAI news release was trying to portray the meeting as something else,” said Prime spokeswoman Paula Levis.
