The Securities and Exchange Commission received a rather peculiar filing claiming that a takeover bid had targeted Avon Products Inc. Allegedly, PTG Capital Partners had set its eyes on the beauty product company, with a massive buyout offer, three times the company’s current market price.
Thursday’s regulatory filing involved a price per share of $18.75, bringing the total cost of the soon-to-become dubious transaction to a massive $8.2 billion. As news of this takeover began spreading, Avon’s shares skyrocketed to a whopping $8.0 day high.
The whopping 20% increase in share price occurred around 12 PM.
Yet here’s the gist: there is no such entity as PTG Capital Partners Ltd. In fact, Avon spokespeople insisted that no such bid had occurred and that there had been no confirmation of PTG’s existence.
There were other irregularities with this bizarre regulatory filing. The document submitted to the SEC contained numerous errors, among which, the misspelling of the bidder’s name (as “TPG”) twice as well as the name of an inexistent law firm.
“Avon reports that it has not received any offer or other communication from such an entity and has not been able to confirm that such an entity exists,” the company stated.
Fearing the illegitimacy of PTG’s bid, Avon shares were halted and the stock pared its gains before trading resumed, bringing the beauty product maker’s shares to $6.94
Such a situation isn’t all that rare. Despite the fact that this is not an often occurrence, the SEC does receive fake filings stemming from inexistent companies. The difference, though, is that until now, such filings never caused massive shifts in stock prices.
The SEC is currently investigating this filing.
Contacting the alleged bidder was impossible, the Wall Street Journal reports, as the contact numbers contained in the filling would immediately go to voice mail. The company’s address was also reflective of the dubious nature of the bid: an office tower which used to house the London Stock Exchange.
There are some similarities between this filing and another private equity firm, TPG Capital, which has had some dealings with Avon. Avon Japan, for instance, was acquired in 2010 by TPG.
The SEC has currently declined to comment on the matter.
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