Crown Central Petroleum Corp. has scheduled a special shareholders meeting Aug. 24 to decide whether the Baltimore-based refiner should be taken private by the family that runs it, according to documents filed yesterday with the Securities and Exchange Commission.
Two-thirds of the votes must be cast in favor of the deal for it to pass. But the scales are weighted in favor of a "yes" vote - since Crown Chairman Henry A. Rosenberg Jr. and his family, who favor the deal, own shares that represent about 45 percent of the vote.
At question is whether Rosemore Inc., a holding company owned by the Rosenberg family, should be able to buy the outstanding shares of Crown for $9.50 each. Crown's board recommends the deal.
A competing $10-a-share offer from Apex Oil Co., of St. Louis, also is on the table.
Despite the scheduled vote on the Rosemore deal, Apex officials are set to discuss their offer with Crown representatives tomorrow.
"They [Crown's board] continue to review the Apex proposal and the meeting for the 14th remains as scheduled," said Crown spokesman J. Steven Wise.
According to yesterday's filing, Crown's Independent Committee - which includes the entire board of directors except Rosenberg - favored the Rosemore deal because Apex wanted an extra month to perform due diligence; it may find the results of that process unsatisfactory; Apex might not be able to refinance Crown's debt; and the Apex deal "could not be consummated with the support of Rosemore."
The Aug. 24 meeting, to be held at the Turf Valley Conference Center in Ellicott City, is still tentative and was included in a preliminary proxy statement. The date will not be certain until a definitive proxy statement is sent to shareholders.
Crown's future has been in question since it hired Credit Suisse First Boston in February 1999 to review the refiner's "strategic alternatives."
A bidding war between Apex and Rosemore then developed when, in early March, Rosemore offered $8.35 a share for Crown's outstanding shares. Apex then upped the ante and the two incrementally raised their bids, eventually reaching the $9.50 and $10 offers.
Crown was founded in 1917 by Texas wildcatters. Louis Blaustein, Rosenberg's grandfather, bought a 48 percent stake in it in 1930. It's been a publicly traded company since 1935.
But the refiner has struggled recently, losing money in eight of the past 11 years, with an average annual loss of more than $10 million.
Last year it lost $30 million, or $3.04 per share, on sales of $1.27 billion. Last month, however, Crown issued a statement saying it netted $8 million in April and May.
Its Class A shares have fallen from more than $40 a decade ago to less than $5 in December. Class B shares, which have one-tenth the voting power of the A shares, have followed a similar decline. Its more widely traded B shares closed yesterday at $9.0625, down 12.5 cents.