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November 29, 1988


By CBR Staff Writer

Prime Computer Inc yesterday finally got around to rejecting MAI Basic Four Inc’s $20 a share cash tender offer, describing it as inadequate and not in the best interests of the company and its shareholders. The board unanimously agreed that the $20 a share offer price does not reflect the intrinsic value of Prime today or the long-term values achievable by the company for all shareholders over the next several years. The company took into account the written opinions of financial advisors Smith Barney, Harris Upham & Co Inc and First Boston Corp, that $20 a share is inadequate from a financial point of view; that Prime’s next annual meeting on May 12 will come before the expiry of MAI’s commitments for its bank financing; the fact that the offer is conditional on the bidder getting sufficient financing and the uncertainty that it will be able to get the cash; and the board’s belief that the highly-leveraged transaction contemplated by the offer would have a significantly adverse effect on Prime’s relationships with its customers, employees, suppliers and other constituencies. To try to cheer shareholders up, Prime also says that new president Anthony Craig and his team have developed and are implementing strategies and planned savings that the board believes will have a positive effect on future operating results, adding it reckons that the current market price of Prime shares reflects the negative effects of the costs and expenses associated with the acquisition of Computervision Corp, but not the expected positive effects of the full-scale integration of the new business. And We also believe that Prime’s current stockholders – not Bennett LeBow, Drexel Burnham Lambert and the other stockholders of MAI Basic Four Inc – should benefit from the realisation of increased values generated by the future successful implementation of our activities and plans, Prime defiantly concludes its broadside.

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