The Avon Products headquarters is seen in midtown Manhattan area of New York, June 21, 2013.Brendan McDermid/Reuters
Avon Products Inc. said it never received a takeover bid from PTG Capital Partners Ltd., a firm listed in a securities filing as offering $18.75 (U.S.) a share for the struggling cosmetics company.
A filing with the U.S. Securities and Exchange Commission indicated that PTG Capital submitted the proposal to Avon's board. The document included errors, such as referring to the firm as "TPG" twice, and named a law firm that doesn't exist. Phone calls to the contacts listed were unsuccessful.
"In response to an SEC filing made by an entity purporting to be named 'PTG Capital Partners,' 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 New York-based company said in an e-mailed statement.
The filing touched off a surge in Avon shares, which were halted before trading resumed. After climbing as high as $8, the stock pared its gains amid concern that the purported bid wasn't legitimate. It's now up 4.1 per cent at $6.94.
"I'd give it less than a 2-per-cent chance of being legit," said Stephen Velgot, head of event-driven research at Renaissance Macro Research in New York. "It's just too strange."
Calls to the primary contact listed, General Counsel Steve Kohe, went straight to voice mail. Calls to Michael Trose of Trose & Cox were unsuccessful as well. A woman who answered the phone said there's no record of someone there or the firm name. SEC spokesman Kevin Callahan declined to comment on the matter.
The phrasing in the filing was similar to wording previously put out by TPG Capital, a private-equity firm that has done deals with Avon. It 2010, TPG acquired Avon Japan from the cosmetics company. The price of Monday's offer also raised questions. At $18.75, it was almost three times the price Avon closed at on Wednesday.
Avon has posted three consecutive years of losses and declining sales, putting pressure on the company to explore its options. Linda Bolton Weiser of B. Riley & Co. had estimated that the entire business could fetch a takeover valuation of about $6-billion.