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A minority of minority shareholders are demanding substantially more than the whopping $2,990 per share Tom Crowley is offering in his take-private bid for US-flag tug operator, shipowner and salvor Crowley Maritime Corp.

Some of them may get a higher price by exercising appraisal rights under a court-approved buyout agreement.

But Crowley looks likely to have kept the cost of acquiring 100% control of his company to the neighbourhood of $100m.

A number of dissident shareholders have committed to accepting the Crowley offer as part of a legal settlement. Among these is California-based mutual-fund firm Franklin Resources. A Franklin fund is the largest outside shareholder and lead plaintiff in the Delaware lawsuit against Crowley.

The cost of buying out all minority shareholders is pegged at $93.5m in recent financial filings by Crowley, based on 31,289 shares not beneficially owned by Crowley before the buyout bid was announced.

However, shareholders who have not signed onto the $2,990 offer through the legal settlement may hold out for substantially more through exercising appraisal rights for their shares.

One observer ball-parks the potential additional cost from holdouts at around $5m. Litigation and other expenses from the protracted dispute might come in at between $2m and $5m.

In March, Crowley announced that the company, the chairman, chief executive and controlling shareholder had set up a special-purpose company and was making the buyout offer to end three years of shareholder strife. A group of minority shareholders including Franklin have complained of company policies allegedly designed to entrench the principal shareholder in control of Crowley at their expense.

Crowley shares rarely trade at all and it is very unlikely that anybody has ever bought a share of the company for as much as the $2,990 now on offer.

However, investor Leonard Rosenthal is protesting the settlement and claims it "significantly undervalues the shares", which are worth between $4,851 and $5,826 based on what he thinks is the most appropriate way of valuing the illiquid share.

Finance professor Rosenthal, a small shareholder who describes himself as an expert in valuing corporate stock, wants the Delaware court to stop the proposed settlement.

The Crowley-hired bankers who arrived at the price proposal did not follow what Rosenthal believes is "the most reliable methodology for a thinly traded stock in a cyclical industry", namely the ratio of current price to book value for a comparable group of companies.

"Professor Rosenthal's objections are reasonable," New York investment banker Gary Lutin told TradeWinds.

"But so too are the views of other shareholders who are tired of fighting with Crowley and just want to get out with their money."

Lutin has run shareholder fora for dissident investors in companies including Amazon.com and Crowley.

Document TRADEW0020070412e34d00018