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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 6, 2000
CROWN CENTRAL PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
MARYLAND 1-1059 52-0550682
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
ONE NORTH CHARLES STREET
BALTIMORE, MARYLAND 21201
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(410)539-7400
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Item 5. Other Events
Crown has received a proposal from Rosemore, Inc., a Maryland
corporation that owns approximately 49% of Crown's Class A common stock and 11%
of Crown's Class B common stock, to acquire all of the issued and outstanding
Class A and Class B common stock held by shareholders other than Rosemore for a
price of $8.35 per share. The proposal is subject to, among other conditions,
the negotiation of a mutually acceptable merger agreement, the unanimous
approval of Crown's independent directors, the approval of the transaction by
Crown's shareholders, and the receipt of all necessary governmental approvals.
Rosemore's proposal will expire at 5 p.m. on Friday March 10, 2000 or if it is
rejected by Crown.
Crown has referred the proposal to a board committee of its
independent directors for their consideration.
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Item 7(c) EXHIBITS
Exhibit No. Decription
- ----------- ----------
99.1 Proposal received from Rosemore,
by letter dated March 6, 2000
99.2 Press Release dated March 7, 2000
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
CROWN CENTRAL PETROLEUM CORPORATION
(Registrant)
By: /s/ John E. Wheeler, Jr.
------------------------
Name: John E. Wheeler, Jr.
Title: Executive Vice President --
Chief Financial Officer
Dated: March 7, 2000
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EXHIBIT INDEX
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Exhibit No. Decription
99.1 Proposal received from Rosemore,
by letter dated March 6, 2000
99.2 Press Release dated March 7, 2000
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EXHIBIT 99.1
[ROSEMORE, INC. LETTERHEAD]
March 6, 2000
STRICTLY CONFIDENTIAL
Board of Directors of
Crown Central Petroleum Corporation
One North Charles Street
Baltimore, Maryland 21201
Attention: Mr. Michael F. Dacey
Ladies and Gentlemen:
As you are aware, on February 25, 1999, Crown Central Petroleum
Corporation (the "Company") announced that it had engaged Credit Suisse First
Boston Corporation ("CSFB") to act as its financial advisor and to provide the
Company with financial advice and assistance in evaluating strategic
alternatives. Since that time, the Company with the assistance of CSFB has
been exploring strategic alternatives through a process in which we have not
been involved. In light of our position as a significant shareholder of the
Company, and in anticipation of our need to review and respond in a timely
manner to any significant strategic alternative which might be proposed by the
Board of Directors of the Company, in December we formed a special committee of
our Board of Directors and charged that committee with the task of evaluating
our investment in the Company. On January 18, 2000, representatives of CSFB,
after discussion with the independent members of the Company's Board of
Directors, invited us to make a proposal concerning the Company and offered to
make available to us information concerning the Company which previously had
been made available to other interested parties. Following our execution of a
confidentiality agreement with you on January 26, 2000, we have been working
together with our legal and financial advisors to complete our preliminary due
diligence and determine whether we wished to make a proposal to you. We have
devoted significant operating, financial, legal and accounting resources toward
this end. Now that our preliminary work is concluded, the Board of Directors
of Rosemore, Inc. ("Rosemore") at a special meeting has determined that
Rosemore should submit this proposal to acquire (the "Acquisition") the Company
at a price of $8.35 for each share of Class A and Class B Common Stock of the
Company not owned by us (the "Per Share Purchase Price"), on the terms and
conditions set forth in this letter.
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In considering our proposal please be assured that our financial
advisors have met with senior management of the Company to identify certain
potential costs savings, and these have been taken into consideration and are
fully reflected in the Per Share Purchase Price. In addition, the Per Share
Purchase Price assumes that in connection with the Acquisition there are, or
following the Acquisition there will be, no obligations of the Company with
respect to any outstanding options to purchase the Company's stock under the
Company's employee benefit plans.
Our proposal is subject to (i) the negotiation of a mutually
acceptable merger agreement between us and the approval of the agreement by our
Board of Directors, (ii) the unanimous approval of the independent directors of
the Company, (iii) the approval of the transaction by the Company's
shareholders, and (iv) the receipt of all necessary governmental approvals. We
do not foresee governmental approvals causing a delay in the timing of the
proposed transaction. The merger would not be conditioned upon financing.
We are prepared to move quickly to negotiate the definitive merger
agreement and to consummate the Acquisition. As part of that process, we would
need to complete any required further due diligence, including our review of
certain important information which we have not previously had the opportunity
to review. While we have no reason to believe that any significant new issues
will be raised, we would like the opportunity to complete our review and, if
necessary, discuss their contents, with senior management of the Company. We
have prepared a form of merger agreement that we are prepared to execute with
the Company, assuming that the disclosure schedule that you prepare in response
to the merger agreement does not disclose any material information which you
did not share with us during our due diligence investigation of the Company to
date. If you wish to pursue our proposal, we will be pleased to provide you
with a copy of the form of merger agreement.
Our proposal will expire at 5:00 p.m., Maryland time, on Friday,
March 10, 2000 or at such time as our proposal is rejected by or on behalf of
the Company.
We reiterate that we are submitting this proposal because we have
been requested to do so by the Company. We have not suggested, and by
submitting this proposal do not mean to suggest, that we would not give
favorable consideration to any alternative proposal made by a third party which
our Board of Directors believes meets our strategic and tax objectives and
considers fair to and in the best interests of Rosemore and its shareholders.
This letter constitutes a non-binding proposal by us with respect to
the Acquisition, and accordingly we shall not have any obligation to you (other
than as provided in the confidentiality agreement previously executed by us)
with respect to our proposal or the Acquisition prior to the execution of a
definitive agreement.
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Please call Mr. Edward L. Rosenberg at Rosemore (410-347-7090), Mr.
Garfield L. Miller III at Aegis Muse Associates (212-245-2552), or Mr. John A.
Marzulli, Jr. at Shearman & Sterling (212-848-8590) if you would like to
discuss any aspect of our proposal.
Sincerely,
ROSEMORE, INC.
By:/s/ Edward L. Rosenberg
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Name: Edward L. Rosenberg
Title: President and Chief
Executive Officer
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EXHIBIT 99.2
[CROWN NEWS RELEASE LETTERHEAD]
Institutional Inquiries:
JOHN E. WHEELER, JR.
Executive Vice President and
Chief Financial Officer
(410) 659-4803
Shareholder Inquiries:
J. STEVEN WISE, Manager,
Corporate & Government Affairs
(410) 659-4859
FOR IMMEDIATE RELEASE
Baltimore, Maryland - March 7, 2000
CROWN CENTRAL RECEIVES BUYOUT PROPOSAL FROM ROSEMORE, INC.
On February 25, 1999, Crown Central Petroleum Corporation (CNPa and CNPb
on the American Stock Exchange) announced that it had engaged Credit Suisse
First Boston as financial advisor to provide Crown with financial advice and
assistance in evaluating strategic alternatives to enhance shareholder value.
Crown has received a proposal from Rosemore, Inc., a Maryland corporation
that owns approximately 49% of Crown's Class A common stock and 11% of Crown's
Class B common stock, to acquire all of the issued and outstanding Class A and
Class B common stock held by shareholders other than Rosemore for a price of
$8.35 per share. The proposal is subject to, among other conditions, the
negotiation of a mutually acceptable merger agreement, the unanimous approval
of Crown's independent directors, the approval of the transaction by Crown's
shareholders, and the receipt of all necessary governmental approvals.
Rosemore's proposal will expire at 5 p.m. on Friday March 10, 2000 or if it is
rejected by Crown.
Crown has referred the proposal to a board committee of its independent
directors for their consideration.
Headquartered in Baltimore, Maryland since 1930, Crown operates two Texas
refineries with a total capacity of 152,000 barrels per day, 331 Crown gasoline
stations and convenience stores in the Mid-Atlantic and Southeastern U.S., and
13 product terminals along the Colonial, Plantation and Texas Eastern Product
pipelines.
