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7 August, 2005ICEM News release No. 98/2000
Crown Shareholders for Fair Value and the US trade union federation AFL-CIO have announced their opposition to the second insider takeover bid in less than a year for Crown Central Petroleum.
The second bid, like the first, is from Rosemore, a private company owned by the family of Crown Central CEO Henry Rosenberg. Shareholders not affiliated with Rosemore rejected the first takeover bid by a 10 to 1 margin this August.
In August, Crown Shareholders for Fair Value argued that the Rosemore bid is less than the book value of the company, less than the liquidation value and a fraction of what the stock was worth two years ago. At that time, a study by the investment banking adviser to Crown Shareholders for Fair Value found that precedent transactions suggest Crown's refineries could be worth US$15.60 to $23.70 per share and that Crown's retail gas stations could be worth another $14.79 to $16.48 share.
The second insider takeover bid of $10.50 per share came just two days after Crown Central replaced four long-time outside directors with candidates who have close ties to Rosemore and Crown, according to a statement issued in Washington yesterday by Crown Shareholders for Fair Value and the AFL-CIO.
Crown Central's Board of Directors now has only three outside directors, less than half the Board, the statement points out. "How an insider-dominated Board of Directors can properly evaluate the fairness of the proposed transaction is anybody's guess," said Richard Trumka, Secretary-Treasurer of the AFL-CIO.
Crown Shareholders for Fair Value is made up of individual shareholders of Crown Central, the AFL-CIO, and PACE International Union. The AFL-CIO's Office of Investment provides research and support for collectively bargained pension funds. PACE is the collective bargaining representative of Crown Central Petroleum refinery employee-shareholders. At the global level, PACE is affiliated to the 20-million-strong International Federation of Chemical, Energy, Mine and General Workers' Unions (ICEM).
Crown Shareholders for Fair Value is not soliciting proxies and no proxies will be accepted.
The second bid, like the first, is from Rosemore, a private company owned by the family of Crown Central CEO Henry Rosenberg. Shareholders not affiliated with Rosemore rejected the first takeover bid by a 10 to 1 margin this August.
In August, Crown Shareholders for Fair Value argued that the Rosemore bid is less than the book value of the company, less than the liquidation value and a fraction of what the stock was worth two years ago. At that time, a study by the investment banking adviser to Crown Shareholders for Fair Value found that precedent transactions suggest Crown's refineries could be worth US$15.60 to $23.70 per share and that Crown's retail gas stations could be worth another $14.79 to $16.48 share.
The second insider takeover bid of $10.50 per share came just two days after Crown Central replaced four long-time outside directors with candidates who have close ties to Rosemore and Crown, according to a statement issued in Washington yesterday by Crown Shareholders for Fair Value and the AFL-CIO.
Crown Central's Board of Directors now has only three outside directors, less than half the Board, the statement points out. "How an insider-dominated Board of Directors can properly evaluate the fairness of the proposed transaction is anybody's guess," said Richard Trumka, Secretary-Treasurer of the AFL-CIO.
Crown Shareholders for Fair Value is made up of individual shareholders of Crown Central, the AFL-CIO, and PACE International Union. The AFL-CIO's Office of Investment provides research and support for collectively bargained pension funds. PACE is the collective bargaining representative of Crown Central Petroleum refinery employee-shareholders. At the global level, PACE is affiliated to the 20-million-strong International Federation of Chemical, Energy, Mine and General Workers' Unions (ICEM).
Crown Shareholders for Fair Value is not soliciting proxies and no proxies will be accepted.