MAI Basic Four Inc is really going to have to come clean on exactly where the cash for its bid for Prime Computer Inc is coming from if it is to persuade Judge David Mazzone of the Massachusetts Federal District Court to lift the injunction against its $20 per share tender offer for Prime: MAI thought that it had come up with enough this time, but Judge Mazzone ruled that the disclosures were still inadequate and refused to lift the injunction until 10 days after MAI certifies that it has mailed audited year-end financial statements of Drexel Burnham Lambert Inc, the disgraced junk bond kings that are arranging MAI’s financing for the takeover bid, to Prime holders; the judge denied Prime’s request that it enforce the Federal Reserve margin regulations against the MAI offer – Prime claims the bid flouts the rules because equity will account for less than 50% of the value of the resulting merged company.
