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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): May 1, 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 (CNPa and CNPb on the American
Stock Exchange) received an amended proposal dated May 1, 2000 from Apex
Oil Company, Inc., a Missouri corporation that owns approximately 14.7% of
Crown's Class A common stock and 3.5% of Crown's Class B common stock, to
acquire all of the issued and outstanding Class A and Class B common stock
held by Crown's shareholders other than Apex by merger for a price of
$10.00 per share. The amended Apex proposal is subject to Apex's receipt
of an irrevocable commitment from a lender reasonably satisfactory to Apex
to provide financing to Crown (on terms reasonably satisfactory to Apex)
in an amount sufficient to repay Crown's 10 7/8% senior notes due 2005 in
the event one or more of the note holders exercise their put rights under
the indenture governing the senior notes following a change of control.
The proposal is also conditioned on receiving all necessary governmental
approvals and approval from Crown's board of directors and shareholders.
Apex has also amended its alternative proposal dated March 29, 2000
to purchase between 3.5 and 4.5 million shares of Crown's Class A common
stock from Crown in a private placement at a price of $9.50 per share by
increasing the proposed purchase price to $10.00 per share. Apex is also
continuing to advance a stock-for-stock proposal that it made in November
1999, which it asserts would value the existing Crown shares at $10.00 per
share. Both of these alternative proposals are stated to include a
shortfall distribution if the stock of the merged company or Crown fails
to reach certain trading ranges, and both are conditioned on the
finalization of replacement financing for Crown's $125 million of senior
notes. Apex has stated that it will post a letter of credit in the amount
of $30,000,000 to secure the shortfall distribution.
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Item 7(c) EXHIBITS
Exhibit No. Description
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99.1 Amended Proposals received from Apex
by letter dated May 1, 2000
99.2 Press Release dated May 2, 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.
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Name: John E. Wheeler, Jr.
Title: Executive Vice President --
Chief Financial Officer
Dated: May 2, 2000
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EXHIBIT INDEX
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Exhibit No. Description
99.1 Amended Proposals received from Apex
by letter dated May 1, 2000
99.2 Press Release dated May 2, 2000
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EXHIBIT 99.1
[Apex Letterhead]
May 1, 2000
Committee of Independent Directors
Crown Central Petroleum Corporation
One North Charles Street
Baltimore, Maryland 21201
Ladies and Gentlemen:
Based upon Crown Central Petroleum Corporation's press release of April
27, 2000 wherein Crown announced its first quarter results of operations,
Apex Oil Company, Inc. has amended its cash proposal to $10.00 per share
as set forth in the enclosed Agreement and Plan of Merger. This Agreement
has been revised to reflect our original cash proposal structure to you
and not the two step process you had requested earlier. Since you
executed such an agreement with Rosemore, Inc., we presume you will find
this structure acceptable.
You will note that we have removed most conditions to closing (including
the completion of due diligence) other than standard closing conditions
and other than obtaining refinancing for the bonds in the event a
bondholder exercises its put rights under the Indenture. As you know, the
Indenture contains a change of control provision which, if triggered,
gives the bond holders the right to put their bonds to Crown at 101% of
the outstanding principal amount of the bonds. A change of control occurs
if a person (or group of persons) is or becomes the beneficial owner of
more than 35% of the voting power of the total outstanding voting stock of
Crown. Excepted from this "person" or "group of persons" is Rosemore,
Inc. As such, Rosemore was not required to condition its proposal on
refinancing the bonds in that Rosemore's acquisition of Crown will not
trigger the change of control provision. This gives Rosemore an advantage
over any other person proposing to acquire Crown. Apex is confident that
it can obtain such financing, and several lenders have expressed an
interest in making such financing available, but no lender can commit to
such a loan at this time without reviewing its proposed collateral and
otherwise satisfying its lending guidelines. Given your familiarity with
Crown and its assets and cash flow, you should be able to come to an
informed opinion as to the likelihood of a lender satisfying these
guidelines and, as such, not discount Apex's offer as a result of this
closing condition.
I refer you also to our letter of March 29, 2000 wherein we described a
stock-for-stock merger and a private placement as alternative proposals.
Todate, you have been unwilling to discuss these proposals with us. Apex
still stands by those proposals for the reasons previously stated. Please
be further advised that Apex hereby increases its private placement
proposal to $10.00 per share. In addition, Apex will agree to post a
letter of credit in the amount of $30,000,000 to secure the "shortfall
distribution" described in our March 29, 2000 letter.
Apex stands willing to consummate any of the three proposed transactions
and we will make ourselves available at your convenience to discuss these
proposals. We still firmly believe that a combination of Apex and Crown
serves the best interests of our respective shareholders, employees,
business partners and communities. Given that our proposals to date
result in the highest values being offered to Crown's shareholders, we
urge full consideration of our position.
By copy of this letter, we are forwarding courtesy copies of our Merger
Agreement to both Credit Suisse First Boston and Skadden, Arps, Slate,
Meagher & Flom.
Very truly yours,
/s/ Edwin L. Wahl
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Edwin L. Wahl, President
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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 - May 2, 2000
CROWN CENTRAL RECEIVES AMENDED BUYOUT PROPOSALS FROM APEX
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Crown Central Petroleum Corporation (CNPa and CNPb on the American
Stock Exchange) has received an amended proposal dated May 1, 2000 from
Apex Oil Company, Inc., a Missouri corporation that owns approximately
14.7% of Crown's Class A common stock and 3.5% of Crown's Class B common
stock, to acquire all of the issued and outstanding Class A and Class B
common stock held by Crown's shareholders other than Apex by merger for a
price of $10.00 per share. The amended Apex proposal is subject to
Apex's receipt of an irrevocable commitment from a lender reasonably
satisfactory to Apex to provide financing to Crown (on terms reasonably
satisfactory to Apex) in an amount sufficient to repay Crown's 10 7/8%
senior notes due 2005 in the event one or more of the note holders
exercise their put rights under the indenture governing the senior notes
following a change of control. The proposal is also conditioned on
receiving all necessary governmental approvals and approval from Crown's
board of directors and shareholders.
Apex has also amended its alternative proposal dated March 29, 2000
to purchase between 3.5 and 4.5 million shares of Crown's Class A common
stock from Crown in a private placement at a price of $9.50 per share by
increasing the proposed purchase price to $10.00 per share. Apex is also
continuing to advance a stock for stock proposal that it made in November
1999, which it asserts would value the existing Crown shares at $10.00 per
share. Both of these alternative proposals are stated to include a
shortfall distribution if the stock of the merged company or Crown fails
to reach certain trading ranges, and both are conditioned on the
finalization of replacement financing for Crown's $125 million of senior
notes. Apex has stated that it will post a letter of credit in the
amount of $30,000,000 to secure the shortfall distribution.
As previously announced, Crown entered into a binding merger
agreement dated April 7, 2000 with 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, pursuant to which Rosemore would acquire all
of the issued and outstanding Class A and Class B common stock held by
shareholders other than Rosemore for a price of $9.50 per share.
Headquartered in Baltimore, Maryland since 1930, Crown operates two
Texas refineries with a total capacity of 152,000 barrels per day, 330
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.
