No Word From MAI on Meeting Rival Bid : J. H. Whitney Launches Tender Offer for Prime
J. H. Whitney & Co. officially launched its tender offer for Prime Computer Inc. on Thursday, while MAI Basic Four Inc. extended its offer without announcing whether it will match or beat the rival Whitney bid.
Whitney, a private New York venture capital firm, is offering to buy Prime, a Natick, Mass., minicomputer maker, in a cash and securities deal valued between $1.2 billion and $1.4 billion.
Prime announced on June 23 that it had agreed to be purchased by Whitney in a friendly acquisition that would result in publicly held Prime becoming a private company. Prime had been searching for a “white knight” for months to save it from MAI’s hostile bid.
MAI, a Tustin computer maker, has been pursuing Prime since November. On June 22, the day Prime revealed that it had received an offer from an unnamed bidder, MAI said it would increase its $1.1-billion offer for Prime. MAI “is still evaluating the situation and is hopeful that we will be able to meet the Whitney offer,” MAI spokeswoman Toni Lee said Thursday.
Separately Thursday, MAI filed a lawsuit against Prime, some of its directors and Whitney. The suit, filed in Delaware Chancery Court, alleges that Prime and Whitney engaged in a “rigged auction” in order to interfere with the bidding process for Prime.
Among other charges, the suit alleges that Prime refused to provide confidential corporate data to MAI after entering into the merger agreement with Whitney. MAI said the information is needed to allow MAI to make its best offer for Prime.
Prime officials were unavailable for comment on the MAI suit.
Whitney is offering $21.50 in cash for Prime’s 49.5 million outstanding shares of common stock, or about 79% of Prime’s stock. Whitney would exchange securities with a face value of $22 per share for the remainder of Prime stock. Various analysts have estimated the “blended value” of the Prime offer at between $19 and $20 per share.
MAI’s offer is a similar combination of cash and securities. The Tustin firm is offering $19.50 per share for about 75% of Prime, and a mixture of preferred stock and bonds for the rest. Analysts have estimated the value of the MAI offer at about $18 per share.
Prime’s stock closed Thursday at $19.25 per share, up 25 cents, in New York Stock Exchange trading. MAI closed at $5.75, down 12.5 cents, in Big Board trading.
