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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): December 17, 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 Central Petroleum Corporation announced today that it had
entered into a definitive agreement and plan of merger with Rosemore,
Inc., a Maryland corporation, which owns, directly or indirectly,
approximately 49% of the Company's Class A common stock and 11% of the
Company's Class B common stock. Under the merger agreement, Rosemore
will, through its wholly-owned subsidiary Rosemore Acquisition
Corporation, acquire all of the issued and outstanding Class A and
Class B common stock held by stockholders other than Rosemore and its
affiliates for a price of $10.50 per share.
The acquisition price of $10.50 per share represents a premium of
31.25% and 50% to the market prices of $8.00 per share and $7.00 per
share of the Company's Class A common stock and Class B common stock,
respectively, at the close of trading on December 14, 2000, the day
prior to the date on which Rosemore announced its intention to seek to
acquire the Company.
The merger was unanimously approved by the Company's committee of
independent directors and, on its recommendation, by the Company's
Board of Directors on December 16, 2000. The Company has received an
opinion from its financial advisor, Credit Suisse First Boston, that
the consideration to be received by the stockholders of the Company in
the merger is fair, from a financial point of view, to the stockholders
of Crown other than Rosemore and members of the group affiliated with
Mr. Paul A. Novelly, and their respective affiliates. The merger is
expected to be completed in the first quarter of 2001.
The merger agreement provides that Rosemore Acquisition
Corporation will merge with and into the Company, resulting in the
Company becoming a wholly-owned subsidiary of Rosemore. The Company
will be the surviving entity in the merger and plans to continue to
operate as a separate company under its current name.
The merger will require the approval of the Company's
stockholders, and the Company will call a special stockholders' meeting
to vote on the merger. Under Maryland law and the Company's charter,
the merger will require the affirmative vote of two-thirds of the
Company's issued and outstanding common stock. Crown's Class A and
Class B common stock will vote as a single class on the merger, with
Crown's Class A common stock having one vote per share, and Crown's
Class B common stock
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having one-tenth of a vote per share. Rosemore's stock in Crown
represents approximately 45.41% of the votes exercisable by Crown's
issued and outstanding common stock. In addition, certain members of
the Novelly group, who among them own approximately 14.70% of the
Company's Class A common stock and 3.48% of the Company's Class B
common stock, representing approximately 13.60% of the votes
exercisable by Crown's issued and outstanding common stock, have agreed
to vote in favor of the merger.
The merger agreement also requires the approval of a majority of
the votes of the stock (other than the stock owned by Rosemore and its
affiliates) present and voting at the stockholders' meeting. The votes
of the Company common stock now owned by members of the Novelly group
will count toward this vote, and the members of the Novelly group have
agreed that their stock will be voted in favor of the merger. The
merger is also conditioned on and subject to other customary closing
conditions.
As previously reported, on April 7, 2000 the Company had entered
into an agreement and plan of merger with Rosemore, pursuant to which
Rosemore agreed to purchase all of the issued and outstanding Class A
and Class B common stock, other than stock held by Rosemore and its
affiliates, for $9.50 per share. That merger agreement was submitted
to the Company's stockholders for approval at a special meeting of
stockholders held August 24, 2000. Apex Oil Company, an affiliate of
Mr. Novelly, had also expressed an interest in acquiring the Company,
and commenced a proxy solicitation in opposition to that merger with
Rosemore. The merger did not receive the necessary two-thirds approval
from the Company's stockholders, and the Company and Rosemore
terminated the merger agreement following the special meeting.
On August 24, 2000, following the failure of Rosemore's prior
merger agreement to receive approval from Crown's stockholders, the
Company requested Apex to present a definitive proposal to acquire all
of the Company's stock for $10.50 per share in a fully financed, all-
cash, unconditional tender offer, and to be able to commence its tender
offer by September 29, 2000. On September 28, 2000, the Company
extended the time for Apex to commence its tender offer until October
31, 2000.
On October 10, 2000, Mr. Novelly proposed that a limited liability
company composed of trusts and entities related to Mr. Novelly effect a
cash tender offer for all Crown stock for
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$10.50 per share. Stockholders not accepting the $10.50 tender offer
would retain their stock and receive a $12.50 contingent value right.
Mr. Novelly also proposed that, following the tender offer, the Company
would acquire Apex by way of a share exchange, the terms of which were
not specified. On November 1, 2000, the Company announced that it had
given Apex a further extension to November 30, 2000. The Company then
reported on November 30, 2000 that it was discussing the Company's
strategic alternatives with both Rosemore and Apex, the two
stockholders with the largest voting positions in the Company.
At the same time as entering into the agreement and plan of merger
with Crown on December 17, 2000, Rosemore also entered into a stock
purchase agreement with members of the Novelly group who own Crown
common stock, under which they agreed to vote their shares of Crown
common stock, representing approximately 14.70% of the Class A common
stock and 3.48% of the Class B common stock, in favor of the merger and
merger agreement. The stock purchase agreement provides that, if the
merger agreement is terminated, these members of the Novelly group will
sell their Crown common stock to Rosemore for $10.50 per share in cash.
These members of the Novelly group have also agreed that, for a period
of five years from the date they sell their shares to Rosemore, they
will not, acting alone or with others, acquire any of the Company's
voting securities or assets or make any proxy solicitation or otherwise
seek to influence or control the management or policies of the Company.
Rosemore has agreed to reimburse the Novelly group $1.75 million for
certain expenses incurred by the Novelly group in connection with their
efforts to acquire the Company. The stock purchase agreement may be
terminated by Rosemore in certain limited circumstances in which there
is a material adverse change to the business, financial condition, or
results of operations of the Company.
Rosemore and the selling members of the Novelly group have agreed
in the stock purchase agreement to enter into an escrow agreement under
which the selling members of the Novelly group will deposit their
shares of Crown stock, and Rosemore will deposit the share purchase
price, with Union Planters Bank as escrow agent, pending release in
accordance with the escrow agreement following the merger closing or,
if the merger closing does not occur, the stock purchase closing.
In connection with the merger agreement and related transactions,
the Company and First Union National Bank, as rights agent, entered
into a second amendment to the Company's rights agreement, dated as of
December 17, 2000, to permit
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the merger and Rosemore's related arrangements with the Novelly group,
by amending the definitions of "Acquiring Person", "Approved
Transaction", "Beneficial Owner" and "beneficially own", as those terms
are used in the rights agreement. The amendment also modified the
definition of "Final Expiration Date" to reflect that the "Final
Expiration Date" under the rights agreement is the earlier of the close
of business on February 14, 2001 or the time which is immediately prior
to acceptance by the State Department of Assessments and Taxation of
Maryland of articles of merger consummating the merger.
The Company's Board also declared the merger and the transactions
contemplated by the stock purchase agreement and escrow agreement to be
an "Approved Transaction" under the rights agreement. As a result, the
execution of the merger agreement, stock purchase agreement and related
escrow agreement does not cause a "Distribution Date" to occur under or
otherwise trigger the operative provisions of the rights agreement.
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Item 7(c) EXHIBITS
Exhibit No. Description
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2 Agreement and Plan of Merger dated as
of December 17, 2000 by and among
Rosemore, Inc., Rosemore Acquisition
Corporation and Crown Central
Petroleum Corporation.
4 Second Amendment to Rights Agreement
dated as of December 17, 2000 between
Crown Central Petroleum Corporation
and First Union National Bank, as
Rights Agent.
99 Press Release.
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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.
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Name: John E. Wheeler, Jr.
Title: Executive Vice President --
Chief Financial Officer
Dated: December 18, 2000
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EXHIBIT INDEX
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Exhibit No. Description
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2 Agreement and Plan of Merger dated as
of December 17, 2000 by and among
Rosemore, Inc., Rosemore Acquisition
Corporation and Crown Central
Petroleum Corporation.
4 Second Amendment to Rights Agreement
dated as of December 17, 2000 between
Crown Central Petroleum Corporation
and First Union National Bank, as
Rights Agent.
99 Press Release.
