Internet Board
Internet Board
| Author | A. Stockholder |
| Date | 00/07/31/23:35 |
| Apex Oil steps up fight for Crown
Rosenberg company offers too little, says rival bidder -------------------------------------------------------------------------------- By Kristine Henry Sun Staff Critics of Crown Central Petroleum Corp. are going on the offensive, urging shareholders to vote against a proposal that would allow the Baltimore-based refiner to merge with Rosemore Inc., a holding company owned by the family that has run Crown since 1930. Apex Oil Co. stepped up its fight yesterday when it filed a preliminary proxy statement with the Securities and Exchange Commission spelling out why it feels the Rosemore deal is unfair. Apex, based in St. Louis, has been trying to take over Crown since November. Apex’s original proposal, in November, called for merging the companies -- and ousting Crown Chairman Henry A. Rosenberg Jr. Then, in March, Apex offered a buyout at $9.20 a share, which was 85 cents a share more than Rosemore had offered earlier that same month. The two companies incrementally raised their bids; Rosemore is now offering $9.50 a share and Apex is offering $10.50 a share. Crown has a book value of $14.47 per share. Crown’s independent board of directors -- which includes everyone on the board except Rosenberg -- has already accepted Rosemore’s proposal, and a vote has been set for Aug. 24. In the SEC filing yesterday, Apex proposes to tell shareholders that it believes, “Crown Central’s board of directors has taken numerous actions to disenfranchise shareholders and potential bidders and preclude a fair process. ... Accordingly, we urge you to join with us and vote no!” If the Apex filing is approved by the SEC, it will be mailed to all shareholders. Through Rosemore, Rosenberg and his family own 49 percent of Crown’s Class A shares and 11 percent of the Class B shares, which have 1/10th the voting power of Class A. The Rosenberg family controls a little more than 45 percent of the votes. Two-thirds of the votes cast must be in favor of the Rosemore deal, which plans to take Crown Central private. In the filing, Apex argues that the Rosemore merger price is too low, is the “result of a biased bidding process” and “is the end result of the desire of certain of Crown Central’s insiders to obtain ownership of Crown Central for themselves at the lowest price.” Crown’s board, in SEC filings, has said it is recommending the Rosemore merger because it believes that the Apex offer has too many contingencies, including completion of a field survey and receipt of appraisals acceptable to the lender financing the Apex takeover. The board also said Apex’s proposal could not be completed without Rosemore’s approval. Rosemore, which has provided millions of dollars in financing for Crown, threatened to pull that support if its merger was defeated, according to the filing. “The independent committee remains uncertain as to whether [Apex’s] proposal could ever be financed,” Crown’s spokesman J. Steven Wise said yesterday. Crown shareholders also should soon be receiving a letter from a group called Crown Shareholders for Fair Value, which is made up of individual shareholders, the AFL-CIO and the Paper, Allied-Industrial, Chemical and Energy Workers International Union, which has been locked out of Crown’s Pasadena, Texas, refinery since 1996. Crown Shareholders for Fair Value also is urging a vote against the Rosemore proposal, saying the price is not high enough. “The Rosenbergs, who more than just coincidentally own controlling interests in both Crown and ‘board-recommended’ acquirer Rosemore,” the letter says, “seem to have used control of Crown’s board and management to attempt acquiring Crown through a process wherein other serious bidders are driven away and only Rosenberg interests are served.” Wise pointed out that Rosenberg recused himself from Crown’s vote on the merger deal and noted that Credit Suisse First Boston, which Crown hired to handle merger offers, wrote that “the [Rosemore] merger is fair to such stockholders, other than Rosemore and its affiliates, from a financial point of view.” Both the shareholder group and Apex also point out that, since the $9.50 offer was made, Crown’s fortunes have improved significantly. Last week, it posted its first profit after more than six quarters of losses. Crown netted $9.2 million in the second quarter that ended June 30, compared with a net loss of $11 million in the second quarter of 1999. |