Rosemore, Apex increase offers

Crown directors demand `best and final' bid numbers

Petroleum

March 31, 2000|By Kristine Henry | Kristine Henry,SUN STAFF

Crown Central Petroleum Corp. said yesterday that it received sweetened buyout offers after the board of directors demanded that two bidders for the Baltimore-based refiner submit "best and final" offers.

Crown said Rosemore Inc., a Baltimore holding company led by Henry A. Rosenberg Jr., who is Crown's chairman, president and chief executive officer, increased its bid by 12 percent, or $1 a share. Rosemore also advanced its deadline from April 17 to 5 p.m. today.

Crown also reported that Apex Oil Co. Inc. of St. Louis has amended its offer, agreeing to pay $9.50 a share in a private placement of 3.5 million to 4.5 million of Crown's Class A shares. There are about 4.8 million outstanding A shares.

Rosenberg and his family control 11 percent of Crown's Class B shares and 49 percent of the Class A shares, which carry 10 times the voting power of the B shares. Rosemore kicked off the bidding war this month when it proposed buying all the stock it did not own for $8.35 a share and taking the company private.

That bid met with a competing offer from Apex, which offered Class A and B stockholders $9.20 a share.

Crown's Class A shares have fallen from more than $40 a decade ago to less than $5 in December. Class B shares have followed a similar decline.

In response to the falling share price, Apex Oil's Paul A. Novelly proposed in November that the two companies merge and that Rosenberg be ousted from his position. That proposal, which Apex says values existing Crown shares at $10, brings the number of offers from the St. Louis company for Crown to three.

That deal includes a "shortfall distribution" promise. It states that if after the merger the share price has not reached $12 for five days by Dec. 31, 2001, the company would pay shareholders the difference between $12 and the highest five-day average price.

Crown spokesman J. Steven Wise said the board is considering all the proposals.

"Obviously they have a short time frame and they're working hard between the time they received the offers and the time they expire," he said.

Crown, which operates two refineries in Texas, 331 gasoline stations and 13 terminals, has lost money in eight of the past 11 years, averaging an annual loss of more than $10 million. For last year, it had a net loss of $30 million, or $3.04 per share, on sales of $1.27 billion.

Its Class A shares closed up 37.5 cents yesterday at $8.375 and the B shares closed at $8.50, up 50 cents.

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