Sent: Tuesday, June 20, 2006 12:03 PM
Subject: Crowley announcement of stock sale to ESOP
Crowley Maritime reported in an
SEC Form 8-K filed this morning that the company recently sold an
additional 2,000 shares of its common stock to the Crowley Maritime
Corporation Employee Stock Ownership Plan (“ESOP”) at a price of $1,913
per share. According to the statement, the full text of which is copied
below, that price was determined to be the "fair market value" of the
stock based on an unidentified "independent appraisal."
The $1,913 price is costing the
ESOP approximately 6% more than the $1,805 reported by "Pink
Sheets" as the stock's most recent trading price.
It is not clear how the transaction benefits
existing shareholders. By arranging to have the company sell 2,000 shares
to the ESOP rather than buying the ESOP's shares in the open market, the
number of outstanding common shares was increased by 2.4%. The dilutive
effect on common stock interest in the company's equity, taking into
account the equity interests of other classes of stock, was to reduce the
share of ownership by 1.3%.
The transaction also dilutes the book value of
equity per share of common stock. The company is selling the stock for
$402.34 per share less than the $2,315.34 per share book value (based on
the $361.5 million stockholders' equity reported by the company in its
most recent SEC
Form 10-Q for the quarter ended March 31, 2006), or roughly a 17%
discount. The net impact is to reduce the book value of equity by $5.09
per share of common stock, about 0.22%.
Please let me know if you have any questions
or comments.
- GL
Gary Lutin
Lutin & Company
575 Madison Avenue, 10th Floor
New York, New York 10022
Tel: 212/605-0335
Fax: 212/605-0325
Email: gl@shareholderforum.com
From
SEC Form 8-K filed June 20, 2006 by Crowley
Maritime Corporation:
Item 3.02. Unregistered Sales of Equity Securities.
On June 15, 2006, pursuant to a Stock Purchase Agreement dated as of
such date, Crowley Maritime Corporation (the “Company”) sold 2,000
shares of its common stock to the Crowley Maritime Corporation Employee
Stock Ownership Plan, (the “ESOP”). The ESOP paid $1,913 per share, the
fair market value of the stock as of June 15, 2006 as determined by an
independent appraisal based on a non-marketable minority interest, for
an aggregate purchase price of $3,826,000. The ESOP borrowed from the
Corporation an amount equal to the purchase price (the “ESOP Loan”). The
ESOP Loan, bearing interest at a fixed rate of 5.0% per annum, will be
repaid over a ten-year term from the Company’s plan contributions. After
giving effect to the transaction, the ESOP owned 3,000 shares of the
Company’s 90,744 outstanding shares of common stock.
The shares of common stock were sold pursuant to an exemption from
registration under Section 4(2) of the Securities Act of 1933, as
amended, because the shares sold were offered only to the ESOP.
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