Crown bidder known for staying unknown

Merger proposal puts privately held Apex in unusual spotlight

November 12, 1999|By Mark Ribbing | Mark Ribbing,SUN STAFF

Crown Central Petroleum Corp. is being targeted for a merger, and the would-be savior of the beleaguered Baltimore oil company is a recently bankrupt Missouri firm with a penchant for secrecy.

Paul A. Novelly, the chief executive officer of Apex Oil Co. Inc. of Clayton, Mo., holds about 15 percent of Crown's voting shares and is not happy about the state of his investment.

Novelly made his feelings known to Crown's board of directors in a letter released Wednesday. He started by pointing out what the directors are doubtlessly all too aware of -- Crown's finances are unimpressive at best. The stock has fallen from more than $40 per share to just over $5. The company has been in the black for only two years in the 1990s.

With these pleasantries out of the way, Novelly made a proposal: "[W]e believe that a dramatic change is required in Crown's strategic direction. Towards that end, I propose a merger of Apex Oil Co. Inc. with Crown."

Just who is this cheeky Apex outfit? It's a frequently asked question, since Apex shows an aversion to publicity that makes J.D. Salinger look like Oprah. The privately owned company refuses to answer even the most basic questions about itself, such as the number of people it employs and the amount of money it makes. Requests for an interview with Novelly were received politely and dutifully yesterday, but none were granted.

Apex was founded in 1930 and pulls in about $1 billion in sales annually. The company has an estimated 800 employees, the highest-ranking of whom is something of an enigma himself.

According to an oil-industry executive who insisted on anonymity, "It's hard to say what's in the company as separated from what's in Novelly's pocket."

The Apex chief largely bailed out of oil after the price declines of the 1980s, which forced the company into a bankruptcy filing on Christmas Eve in 1987. Novelly sold Apex's Clark Oil & Refining Corp. division and became more heavily involved in real estate.

Novelly, 56, is involved in a range of St. Louis-area real estate endeavors, including new residential developments in the picturesque Missouri River village of St. Albans and the financing of a riverboat casino project.

Novelly recently donated 20 acres of land to the Catholic high school from which he graduated in 1961.

Further to the west, Apex was the owner of the Copper Mountain ski resort in Colorado before selling it to Intrawest Corp. of Canada in 1997, a year after the bankruptcy case was closed.

Despite these real estate involvements, said the oil executive, Novelly's still got some crude flowing in his veins: "He's an oil guy, so he keeps dabbling in it."

In addition to the stake in Crown, Novelly and Apex own subsidiaries in the mining, shipping, asphalt and oil industries, and even have a couple of fuel distribution sites in Baltimore City.

People who have worked with Apex describe it as a close-to-the-vest operation that has played the complex angles of the oil and real estate industries shrewdly but cleanly.

"We had an excellent rapport," said Harry Mossgrove, the former president of the Copper Mountain resort. "They're the highest in integrity and honesty. They didn't have a lot of knowledge about running the ski resort, but they certainly brought a lot of capital and a lot of experience we didn't have."

Whether this impression of the shadowy Apex will prove true remains to be seen. If Novelly makes good on his wish to take over one of Baltimore's largest companies, he and Apex will become increasingly prominent -- whether they like it or not.

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