MAI Basic Four Inc, as reported briefly Friday, has lowered its tender offer for Prime Computer Inc to $19.50 a share cash, which covers only the 49.5m primary shares outstanding. If it wraps up the shares out, MAI will exchange paper – junior subordinated debentures and preference shares – with a face value of $21 for each of 16.2m additional shares that could be issued to owners of Prime options and convertible bonds. Prime responded by saying its board would meet quickly to consider the offer, adding that it had serious reservations about the offer. After six months of public statements by MAI that it was ‘committed’ to its $20 per share cash offer for all of Prime’s shares, MAI has now lowered its cash price, changed to a partial offer and is offering MAI stock and bonds of questionable value for a significant portion of Prime’s fully diluted shares, it said. MAI chairman Bennett LeBow said the revised offer represents a full and fair price in light of Prime’s recent lowering of turnover projections. He also said the revised offer was justified by the fact that Prime’s directors have adopted various employee benefit and pension plans which MAI believes could cost $170m. MAI has now met one Prime complaint about the bid – it has arranged financing totalling $1,400m, which should leave enough to provide working capital for the combined company, which would of course be hideously debt-laden.
