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Internet Board
| Author | Washington Post |
| Date | 00/02/03/16:15 |
| Crown Central Adopts 'Poison Pill'
By Martha M. Hamilton Washington Post Staff Writer Thursday, February 3, 2000; Page E17 The board of directors of Crown Central Petroleum Corp., an oil refining and marketing company based in Baltimore, bought itself some time yesterday with a one-year "poison pill" to protect the company from takeover. The financially troubled company is under intense pressure both from its union--which is staging a nationwide boycott since Crown locked out refinery workers in Texas--and from Apex Oil Co. owner and Crown shareholder P.A. "Tony" Novelly, who sent the board a letter in November proposing to take over the company. Novelly could not be reached for comment. The tightly controlled company's stock has been sinking--falling from a high of $40 in 1996 to a low of $4.62 1/2 in December. Crown stock closed at $6.87 1/2 yesterday, down 12 1/2 cents. A year ago, Crown Central hired Credit Suisse First Boston Corp. to weigh its options, including selling all or a part of the company. The one-year moratorium on a takeover will allow that process to be completed in "an orderly fashion," said John E. Wheeler Jr., Crown's chief financial officer. In announcing the poison pill, which makes a hostile takeover nearly impossible by making it too expensive, Crown said it would "ensure that any strategic transaction undertaken by Crown will be one in which all stockholders can receive fair and equal treatment and to guard against partial tender offers, open market accumulations and other abusive tactics that might result in unequal treatment of stockholders." Wheeler said that the company has engaged in no "sit-down negotiations" with Apex, a privately held company based in St. Louis that owns 14 percent of Crown's Class B shares. Last month Credit Suisse First Boston, "after discussion with the independent members of the Board," invited Rosemore Inc., a holding company made up of family members of Crown chief executive Henry A. Rosenberg Jr., to make a proposal concerning Crown. Rosemore, which is headed by Rosenberg, owns almost 50 percent of Crown's controlling Class A shares and 16.7 percent of the Class B shares. Wheeler said that other potential bidders, whom he would not identify, also have signed confidentiality agreements in order to take a look at the company. Joe Drexler, special projects director for the union that represents Crown's workers, reacted to the announcement of the poison pill by asking, "Why would you put a company up for sale in February and a year later put a poison pill in to drive investors away?" Nell Minow of the shareholder advocacy group Lens Inc., noted that the poison pill is in effect for only a year--"a very short time," she said. "It sounds like a modest step for the board to take while it considers its options," Minow said. |