From: R.KITTREDGE@MD-B.Prime.COM (Roland Kittredge - Marketing 620-2800 x4666, 508)
Newsgroups: comp.sys.prime
Subject: CVN Stock Cut to $12
Date: 14 Aug 92 18:26:44 GMT
Article-I.D.: usenet.9208141829.AA06486
Reply-To: Info-Prime@Blx-A.Prime.COM


   Prime Computer's Offering of Shares Again Cut in Price
   ----
   By Ron Suskind
   Staff Reporter of The Wall Street Journal
08/14/92
   The offering price of shares in Prime Computer Inc. was lowered
again, to only $12 a share, reflecting waning investor interest in
the company and in initial public offerings in general.
   The lower price means that Shearson Lehman Brothers Holdings Inc.
will take an additional pretax charge of about $40 million on a
soured "bridge" loan to Prime's owner, on top of a $137 million
pretax charge announced earlier, according to people familiar with
the transaction.
   Prime, burdened by heavy debt ever since a leveraged buy-out by
venture capitalist J.H. Whitney & Co. took it private in 1988, will
offer 25 million shares, or a 52% stake, to the public. Initially it
planned to offer 15.8 million shares at $18 to $20 a share. It then
the number of shares to 20 million.
   The recapitalized company will be named Computervision Corp.,
focusing on software and services, and is expected to close Prime's
computer manufacturing operation. "With the IPO market not as strong
as it was and some ups and downs in earnings for companies like
Computervision, the price has really taken a hit," says Harry Lange,
a computer analyst at Fidelity Investments.
   After the offering, 52% of Computervision's stock will be owned
by the public, 35% by DR Holdings Inc., Prime's parent until the
offering is complete, and 13% by Shearson. DR, which is majority
owned by J.H. Whitney, is expected to enter into bankruptcy
liquidation proceedings after the offering, with its 35% stake going
to DR's bondholders, the largest of which are Putnam Cos. and Kemper
Financial Services.
   Shearson, the securities unit of American Express Co., helped
finance DR's purchase of Prime, based in Natick, Mass., with a $500
million "temporary" bridge loan. But it got stuck with the loan when
the junk-bond market weakened.
   Shearson will get 6.2 million Computervision shares, valued at
cash as a result of the offering.
   A Shearson spokesman said, "The combination of overall market
conditions and institutions exercising tremendous pricing power with
these types of IPOs caused the price to be where it is."
   In addition to the stock offering, Computervision will sell $300
million in new debt securities. The recapitalized company will have
$358.5 million in debt, compared with Prime's debt of $918.8
million.
   Analysts say that bondholders and Shearson might have emerged in
better shape, but haggling over how to divide the pie caused
Computervision's stock offering to miss a hot market for initial
public offerings earlier this year.
   "Everyone realized that Computervision stock was the golden
goose," said Charles Foundyller of Daratech Inc., a market research
firm in Cambridge, Mass. "But one grabbed the leg, another grabbed a
wing, another got the neck, all pulling hard, and they realize now
they could kill the goose if they keep this up."
   "Bondholders are not happy, but we've made an agreement and we'll
have to take what we can get," said a person close to the
earlier, it certainly would have helped."
Newsgroups: comp.sys.prime