MAI Hikes Bid for Prime Unit to $525 Million

MAI Basic Four, hoping to keep alive its chances of acquiring Prime Computer’s minicomputer business, on Tuesday revised its offer for the operation to $525 million in cash.

Previously, MAI offered $450 million in cash and notes with a face value of $150 million for the unit. Analysts said the new all-cash offer probably will be more attractive to Prime’s lenders, however, because of the uncertain market value of the securities that MAI had offered.

MAI, a Tustin computer maker controlled by New York investor Bennett S. LeBow, recently dropped its nine-month effort to buy all of Prime. Instead, it is seeking to purchase only Prime’s minicomputer business, which accounts for one-third of the Natick, Mass., computer company’s sales.

Whitney Offer Snagged

Prime has rebuffed all of MAI’s previous overtures, and on June 23 it agreed to be acquired by J. H. Whitney & Co., a New York venture capital firm, in a deal valued at $1.4 billion. The Whitney buyout hit a snag last week, however, when Chemical Bank in New York and First National Bank of Boston asked Whitney to raise more financing because of Prime’s deteriorating financial condition.

The bank’s request came one day before Prime reported a $19-million loss for the quarter ended June 30.

Whitney has said it is negotiating with potential lenders to try to raise the additional financing. Donald Ackerman, a Whitney general partner, declined to comment Tuesday on efforts to secure that financing.

Some analysts have said that Whitney’s financing difficulties could help MAI’s chances of buying the minicomputer business.

MAI said in a prepared statement that it amended its offer, which expires Aug. 9, “with a view to simplifying the choices available” to Prime’s directors and shareholders. A company spokeswoman declined further comment,

Prime spokesman Joe Gavaghan said the company’s board would meet to review MAI’s new offer.