Crowley readies
share buyout after settling with its dissidents
Tradewinds
US shipping giant
Crowley Maritime is settling a lawsuit brought by its dissident
shareholders and simultaneously mounting a take-private buyout bid
at a whopping price of $2,990 per share of common stock.
The Oakland and
Jacksonville-based shipping, towing and salvage company says its
principal, Thomas B Crowley Jr, is forming a wholly owned company to
mount the offer for all unaffiliated shares. The new entity will
subsequently merge with Crowley Maritime to make it a
single-owner private company.
The Crowley share is
illiquid and not listed on any exchange but the $2,990 offer looks
impressive by available measures. According to Crowley Maritime
financial filings, the closing "Pink Sheets" high bid for the share
two years ago in the first quarter of 2005 was $1,175. The
corresponding figure in the fourth quarter of 2006 had risen to
$1,925.
The last reported bid
price, according to a shareholder forum for dissident Crowley
investors, was $2,501.
The take-private
tender comes in connection with the settlement of a lawsuit by
dissident shareholders.
The Franklin Balance
Sheet Investment Fund, a shareholder, has had a Delaware
class-action lawsuit ongoing against Crowley Maritime since
November 2004 over allegedly preferential treatment shown to the
company's principal at the expense of other shareholders' interests.
At issue were company payments for a life-insurance policy for
chairman and chief executive officer Tom Crowley. Dissidents
including Franklin had objected that it should not be company policy
to perpetuate the control of the company by its dominant
shareholder.
The settlement with
Franklin is contingent upon Crowley Newco Corp (the Tom
Crowley-controlled buyout entity) owning 95% of outstanding common
stock and upon the tender of a majority of outstanding shares by
unaffiliated stockholders.
In announcing the
settlement offer and buyout plan, Crowley says the buyout entity
currently beneficially owns about 65.2% of outstanding common stock
as a result of agreements with certain shareholders.
As of 15 February,
Tom Crowley had 68.0% of voting control in the company, owning some
49.3% of Class A common stock, 100% of a non-voting-class of common
stock and 99.9% of a preferred, voting-class stock.
Crowley Maritime
did not become public as the result of an initial public offering
(IPO) but involuntarily after the number of its shareholders rose to
an amount that imposed the public-company status on it.
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