Crown Investor Novelly Urges Merger With His Apex Oil

Washington, Nov. 10 (Bloomberg) -- Crown Central Petroleum Corp. shareholder Paul Novelly proposed that the company merge with his Apex Oil Co., a privately held petroleum marketer and distributor.

Novelly, the chief executive of Apex, made the proposal in a letter to the board of Baltimore-based Crown, which owns two Texas oil refineries. The letter, dated Monday, was included in a Schedule 13D filed with the Securities and Exchange Commission. In the letter, Novelly wrote that his investment group was "not satisfied with the performance of Crown's stock."

The filing didn't disclose the value of the proposed transaction.

The plan outlined in the letter said Apex has "expressions of interest fromlenders" sufficient to retire $125 million of Crown's long-term debt and replace current operating lines of credit on "more favorable" terms. Apex proposed that Crown pay to Apex shares of newly issued Class A common stock equal to 35 percent of Crown's outstanding common stock.

Crown in February said it was considering a possible sale of all or part of the company. Crown Class A shares closed unchanged at 5 3/4. Company shares have fallen more than 50 percent since late June.