Crown Books Corp., which was forced to delay its initial sale of stock to the public last month when the Securities and Exchange raised questions about its financial statement, will go ahead with the offer today at a price of $25 a share.
The offering of 2.5 million shares of common stock will be made through a group of underwriters led by Prudential-Bache Securities Inc.
As expected, the offering price of $25 a share is substantially lower than the indicated range of $32 to $36 a share established by Crown and its underwriters when the public sale was first scheduled to begin last month.
Crown announced on July 15 that the SEC, after raising questions about the firm's financial statement, had ordered it to cut quarterly profits by amounts ranging from 16 to 59 percent. In response to the SEC's action, Crown said it would amend its financial statement to reflect, among other things, interest expense on bank loans. Crown's profits had appeared to be larger than they actually were because Crown had failed to deduct interest expenses on bank loans.
The announcement not only affected the asking price for Crown's shares, but also triggered a nosedive in the stock of Crown's parent company, Dart Drug Corp.
After dropping $26 in a single day's trading in the over-the-counter market following Crown's July 15 announcement, Dart's stock has continued to level off, declining more than 24 percent in the last month.
Crown Books is the second Dart Drug subsidiary to be spun off to the public this year. When the Trak Auto chain went public in April, the stock was offerred at $22 a share. By the end of the day was selling for $33. Yesterday, it closed on the over-the-counter market at 40 1/2 bid, 41 asked.