<PAGE>
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 9, 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
<PAGE>
Item 5. Other Events
Crown has received a proposal from Apex Oil Company, Inc., a Missouri
corporation that owns approximately 15.4% of Crown's Class A common stock, to
acquire all of the issued and outstanding Class A and Class B common stock held
by shareholders other than Apex for a price of $9.20 per share. The proposal
is by its terms subject to approval by the board of directors and shareholders
of Crown, to necessary governmental approvals, and to Apex Oil Company's
ability to conduct due diligence to verify that there are no material adverse
developments which have not been disclosed in Crown's public filings. The
proposal will expire at 5 p.m. on Friday March 17, 2000.
Crown has referred the proposal to a board committee of its
independent directors for their consideration.
<PAGE>
Item 7(c) EXHIBITS
Exhibit No. Description
- ----------- ----------
99.1 Proposal received from Apex,
by letter dated March 9, 2000
99.2 Press Release dated March 10, 2000
<PAGE>
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 10, 2000
<PAGE>
EXHIBIT INDEX
-------------
Exhibit No. Description
99.1 Proposal received from Apex,
by letter dated March 9, 2000
99.2 Press Release dated March 10, 2000
<PAGE>
EXHIBIT 99.1
[APEX LETTERHEAD]
March 9, 2000
March 9, 2000
The Board of Directors
Crown Central Petroleum Corporation
One North Charles Street
Baltimore, Maryland 21201
Ladies and Gentlemen:
As you are aware, for some time Apex Oil Company, Inc. ("Apex") has been
interested in discussing a possible business combination between Apex and
Crown Central Petroleum Corporation ("Crown"). Unfortunately, for a variety
of reasons we have been unable to meet and discuss with you the nature or
extent of our interest. Despite our past inability to engage in discussions
with you concerning a business combination, we remain interested in a
potential transaction with Crown.
We have recently learned that Rosemore, Inc. ("Rosemore", whose members
include the Chairman of the Board and CEO of Crown and various members of his
family, as well as Crown's outside legal counsel), has been invited by you to
make an acquisition proposal and, in response, based on their due diligence
to date, has proposed to acquire Crown at a price of only $8.35 per share.
By its terms, the Rosemore proposal was made subject to:
(1) the negotiation of a mutually acceptable merger agreement;
(2) approval of the Rosemore board of directors;
(3) approval of the independent directors of Crown;
(4) approval of the merger by Crown's shareholders;
(5) receipt of all necessary governmental approvals; and
(6) completion of Rosemore's due diligence (which began in January,
2000).
In addition, our reading of Rosemore's proposal - which was submitted
without a copy of their proposed form of merger agreement - provides you with
little more than 4 days to accept or reject their proposal.
We view the Rosemore invitation and proposal as express affirmations by
Crown's Chairman and CEO, and other members of its board, that now is the
appropriate time for Crown to negotiate a sale, merger or other acquisition.
We are disappointed that it took our act of pursuing a shareholder proposal,
for presentation at the upcoming annual meeting, to spur your action. Our
shareholder proposal, seeking a resolution for the board to immediately take
action towards a sale of Crown as a whole, was bitterly - and unsuccessfully
- - fought by Crown's management before the SEC. Earlier this week we were
<PAGE>
informed by the SEC that we had prevailed and that Crown would be required to
present our resolution for a shareholder vote at the annual meeting. Only
when faced with this prospect of a shareholder vote did Rosemore move forward
with its offer. We believe Rosemore's short time fuse is unfair and that
their offer price is inadequate. Accordingly, we are formally submitting for
consideration by you an all-cash merger proposal which we believe is superior
to the Rosemore proposal in every way.
Apex proposes to acquire Crown in a cash merger in which each share of
Class A and Class B common stock of Crown would be exchanged for $9.20 in
cash, a 10% premium over the Rosemore price. Under separate cover we are
submitting a draft of the form of merger agreement we propose for the
transaction. Given the time constraints imposed upon you for acceptance of
the Rosemore proposal, we thought it appropriate to inform you as quickly as
possible of the general terms of our proposal, with the details - the merger
agreement terms - to follow within a matter of hours.
As you will note, our proposed form of merger agreement closely follows
other such agreements used in oil industry acquisitions, and contains only
usual and customary provisions for the industry. As with the Rosemore
proposal, our proposal is conditioned on the approvals of your board and
shareholders, necessary governmental approvals, and our ability to conduct
due diligence to verify that there are no material adverse developments which
have not been disclosed in your public filings.
Unlike the Rosemore proposal, the Apex board has approved our proposed
merger; therefore, no additional board approvals are required from our side.
Further, we do not believe that we will require anything like the 2 months
utilized to date by Rosemore for due diligence, and anticipate being able to
commence and complete our due diligence in short order. Our proposal has no
financing contingency, as Apex has adequate cash resources to fully fund the
purchase of all Crown shares at the $9.20 per share price. We realize that
your 10.875% Senior Notes, and one or more of your working capital lines, may
have to be refinanced as a result of our merger and we expect to receive a
commitment for such refinancing in the next few days. Additionally, in
recognition of the fact that merger transactions should receive full and
adequate consideration, our proposal will be open and subject to acceptance
by you until 5:00 p.m. Maryland time, on Friday March 17, 2000.
Our proposal contains superior value for Crown shareholders - a 10%
premium over the amount offered by Rosemore - and our terms and
conditions provide greater certainty for consummating the transaction.
We note that Rosemore, in their proposal, makes much of the fact that
they are only submitting a proposal because they were "requested to do
so by the Company." We, on the other hand, are submitting our proposal
because we believe that a merger of Crown and Apex would serve the best
interests of our respective shareholders, employees, business partners
and communities.
<PAGE>
Because we believe so strongly in the opportunities for our combined
enterprise, Apex is willing to explore, if Crown so desires, as an
alternative to an all cash transaction, an all stock transaction so that
existing Crown shareholders may participate in the combined enterprise. We
believe that an all stock transaction could be structured to result in Crown
shareholders receiving equity in the combined enterprise valued at $10.00 or
more for each existing share of Crown common stock.
We firmly believe that our all-cash proposal is superior in every way to
the Rosemore proposal. This superiority, combined with our flexibility to
structure an all-stock transaction of even greater value, makes us confident
that you will give our proposal careful consideration. We would be happy to
meet with you, or with a designated committee of the board, to discuss our
offer and to answer any questions you may have.
We look forward to your response.
Sincerely,
APEX OIL COMPANY, INC.
/s/ Edwin L. Wahl
-----------------------
Edwin L. Wahl
President
<PAGE>
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 10, 2000
Crown Central Receives Buyout Proposal from APEX OIL COMPANY, INC.
- ------------------------------------------------------------------
Crown Central Petroleum Corporation (CNPa and CNPb on the American Stock
Exchange) has received a proposal from Apex Oil Company, Inc. by which Apex Oil
proposes to acquire all of the issued and outstanding Class A and Class B
common stock held by shareholders other than Apex for a price of $9.20 per
share. The proposal is by its terms subject to approval by the board of
directors and shareholders of Crown, to necessary governmental approvals, and
to Apex Oil Company's ability to conduct due diligence to verify that there are
no material adverse developments which have not been disclosed in Crown's
public filings. The proposal will expire at 5 p.m. on Friday March 17, 2000.
Crown understands that Paul A. Novelly is the chairman of Apex Oil
Company. Mr. Novelly, Golnoy Barge Company, Inc., The Capital Trust u/i
February 4, 1994, and the Novelly Exempt Trust u/i August 12, 1992 previously
filed a Schedule 13-D disclosing that they collectively own approximately 15.4%
of Crown's Class A common stock.
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.
