Crown gets reprieve from one of bidders

Rosemore removes deadline in its offer for the company


April 04, 2000|By Kristine Henry | Kristine Henry,SUN STAFF

Crown Central Petroleum Corp.'s board of directors won breathing room when one of the bidders for the Baltimore-based refiner removed the expiration date for its offer.

Rosemore Inc., a holding company controlled by the family that runs 70-year-old Crown, said its offer will remain on the table until it is rejected.

The holding company originally said its offer to pay $8.35 a share for the stock it does not already own would expire March 10. It later moved the deadline to April 17. But in giving its "best and final" offer last week, Rosemore said it would pay $9.35 a share and set Friday as an expiration date.

Edward L. Rosenberg, chief executive officer and president of Rosemore, declined yesterday to explain the various deadline strategies.

"It's not appropriate to comment now," Rosenberg said.

The Rosenberg family controls 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.

Its offer is up against three proposals put forward by Apex Oil Co. Inc. of St. Louis. Apex officials made an offer of $9.20 in cash for Class A and B shares that expires April 17; a merger of the two companies; and a private placement purchase of up to 4.5 million of previously unissued Class A shares for $9.50 each.

Crown has lost money in eight of the past 11 years, with an average 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 have fallen from more than $40 a decade ago to less than $5 in December. Class B shares have followed a similar decline.

To address those problems, the company hired an investment banker in early 1998 to help it find "strategic alternatives," which could include selling all or part of the refiner's assets.

Also yesterday, a complaint was filed with the Securities and Exchange Commission on behalf of two shareholders alleging that Crown has understated the impact of a boycott against the refiner.

The two shareholders have never worked for Crown but are members of the Paper, Allied-Industrial, Chemical & Energy Workers Union International (PACE). Nearly 300 PACE workers were locked out of Crown's Pasadena, Texas, refinery in 1996 and have urged people to boycott Crown stations.

"In our analysis, affirmative efforts of a new buyer could result in a significant rise in stock price that is closer to the estimated value of the company's assets, but potential buyers may be dissuaded by the company's misreporting," the complaint said.

J. Steven Wise, a Crown spokesman, dismissed the complaint saying the company had complied with SEC regulations, and that the union was simply continuing its campaign against the refiner.

Crown's widely traded B shares closed down 50 cents yesterday at $8.25.

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