The proposed acquisition of Prime Computer Inc by J H Whitney Co has run into trouble following Prime’s announcement that it expects to report a net loss of about $19m for the second quarter to June 30, compared with a profit of $7.2m last time, on turnover down 5% at about $387m (in fact sales came out at $381m, see page 5); Prime blames the loss on $27m of non-operating expenses tied mainly to defending itself against MAI Basic Four Inc’s bid. Whitney says its banks have demanded that it arrange substantial additional financing for its own bid because the company’s poor performance puts in doubt its ability to generate enough cash flow to service the enormous burden of debt it will bear after the Whitney buyout. Whitney says it is negotiating with the banks and with a major financial institution for additional finance to bolster its bid.
