No word of next owner as Crown deadline passes

Rosemore Inc. bids $9.35 per share

Apex offering $9.50

Oil industry

April 01, 2000|By Mark Ribbing | Mark Ribbing,SUN STAFF

The deadline for a deal on the purchase of Crown Central Petroleum Corp. came and went yesterday afternoon, without any word on who will be the next owner of the troubled Baltimore oil company.

Rosemore Inc., a Baltimore holding company led by Crown Chairman, President and Chief Executive Officer Henry A. Rosenberg Jr., had set a deadline of 5 p.m. yesterday for Crown's board of directors to accept its bid. The parties issued no announcements and refused repeated requests for comment into the night.

The Rosenberg family owns 49 percent of the company's Class A shares and 11 percent of its Class B shares. The Rosemore bid of $9.35 per share, if accepted, would turn Crown into a privately held company.

However, Rosemore has a rival. Apex Oil Co. Inc., a highly secretive oil and real estate company based in the St. Louis suburb of Clayton, Mo., owns 14.7 percent of Crown's Class A shares and 3.5 percent of Class B shares. It has made a bid of $9.50 per share. That bid will not expire until April 17.

Both Rosemore and Apex recently increased their bids after Crown's board demanded that the two suitors come up with their "best and final" offers.

Analysts have said that a victory by Crown's ruling family would probably trigger a spate of shareholder lawsuits.

Crown's Class A shares closed yesterday at $8.5626, up 18.75 cents. The Class B issues finished at $8.75, an increase of 25 cents. As recently as the last day of 1997, Crown's share prices were over $20.

The main difference between the two classes of shares is their voting power: Each Class A share holds 10 times the electoral punch of a Class B share.

The depressed stock reflects Crown's lingering financial malaise. The company has had only three profitable years in the past 11. Last year, it reported a $30 million net loss on revenue of $1.27 billion.

Frustrated by this poor performance, Apex Chief Executive Officer Paul A. Novelly called for a merger between his company and Crown in a letter to Crown's board of directors.

Apex says such a merger would value Crown's stock at $10 per share. It stated that, if after the merger, Crown's share price does not reach $12 for five days by the end of 2001, the company would pay shareholders the difference between $12 and the highest five-day average share price.

The recent struggle between Apex and Rosemore began on March 7 when Rosemore offered to pay $8.35 per share for all the stock it did not own.

Apex responded by making a second offer, which promised $9.20 per share.

Then Crown said Thursday that Rosemore had increased its bid to $9.35 per share and changed its deadline from April 17 to 5 p.m. yesterday. Apex had raised its offer to $9.50 per share and proposed a private placement of up to 4.5 million, or 94 percent, of Crown's Class A shares.

Apex, which has about 800 employees and takes in about $1 billion in revenue per year, has suffered some financial reversals of its own. Declines in the price of oil caused the company to seek bankruptcy protection on Christmas Eve of 1987.

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