MAI Chief Quits Amid Battle for Prime
The president and chief executive of MAI Basic Four has resigned unexpectedly amid the company’s protracted takeover battle for Prime Computer.
William B. Patton Jr., who is credited with engineering the financial turnaround of Tustin-based MAI, is leaving the firm “to devote more time to his other personal and business interests,” MAI Chairman Bennett S. LeBow said Tuesday.
Patton’s resignation is effective Sunday.
He will be temporarily replaced by William Weksel, an MAI board member who briefly served as MAI’s president in 1985. LeBow and Weksel are business partners who together hold a controlling interest in MAI.
Analysts Surprised
Patton, 53, chief executive of the Tustin computer maker since June, 1985, will remain on MAI’s board and serve as a consultant. He could not be reached for comment.
Analysts expressed surprise at the resignation, which comes at a crucial time in MAI’s 7-month-long bid to acquire Prime. MAI recently had appeared to be moving closer to a merger with Prime, and Patton seemingly has been an enthusiastic supporter of the bid.
“A couple of months ago when I saw (Patton) face to face he was all gung ho” about the merger, said Robert M. Johnson, a Houston technology analyst. “He was really fired up.”
MAI and Prime officials recently met for the first time since the takeover began to discuss MAI’s $1.1-billion bid for Prime, a Natick, Mass., maker of minicomputers. Last Thursday, Prime agreed to give MAI the same confidential company data it has given to several other prospective suitors.
Several analysts were puzzled by the timing of the resignation and suggested that it could signal a falling out between Patton and LeBow. Although Patton has been involved in the bid as chief executive, the deal is being orchestrated primarily by LeBow and Drexel Burnham Lambert, the investment bank arranging most of the financing.
Analysts speculated that Patton may have left MAI because he was dissatisfied with the lesser role he might play if the merger with Prime went through.
But Bertrand H. Weidberg, an MAI senior vice president, said the resignation was “unrelated to the Prime bid.”
“Bill has said he has some personal and business interests that required more time than he could devote while being fully committed as chief executive and president,” Weidberg said.
Patton, a former Honeywell Inc. executive and president of computer maker Cado Systems Inc., joined MAI Basic Four in 1985 as president and chief executive. The company’s predecessor, Management Assistance Inc., had lost $17.1 million in 1984.
Under Patton’s leadership, the company sooned returned to profitability and went public in 1986.
For the year ended Sept. 30, 1988, MAI earned $24.5 million on revenue of $420.8 million.
However, MAI’s financial performance has faltered in the current year. For the six months ended March 31, earnings fell 34% to $7.9 million, while revenue was up 11% to $212.1 million.
Analysts blamed MAI’s recent financial problems on takeover-related costs, a slump in the minicomputer industry and the strengthening of the U.S. dollar against certain European currencies, which hurt foreign sales.
