The bid for Avon that apparently was not

Author: Associated Press
Published:
MGN

NEW YORK (AP) – Avon said it had received no takeover offers Thursday after a purported $8 billion bid for the company filed with federal regulators led to three halts in the trading of its shares.

It said it can’t confirm that the company, calling itself PTG Capital Partners, exists. Calls to the company, which claimed London as its headquarters in the filing, went unanswered.

Shares of Avon were halted several times due to volatility after the filing appeared on the website used by the Securities and Exchange Commission, a trusted source for investors.

An entity calling itself PTG said that it had submitted a bid of $18.75 per share to the board at Avon. That was almost triple the stock’s closing price on Wednesday, an enormous premium.

The filing contained numerous typos, however, including varied spellings of the company’s own name.

That the filing appeared on the website used by the SEC immediately raised questions about the vulnerability of platforms relied upon by investors globally.

Jordan Thomas, a former lawyer at the SEC, said that a bogus filing with the commission intended to push up the value of a stock would be brazen act, much like using unwitting police officers to pull off a heist.

“It’s not some bogus blog post that’s gone through 15 different countries and servers,” said Thomas, now a partner at Labaton Sucharow.  “Any time you put out false information in the marketplace, you leave a trail that can be followed by law enforcement. This trail goes right through the SEC.”

The SEC would not comment Thursday.

A bid for a struggling Avon would not be surprising and it has happened in recent years, lending more credence to the bid initially.

The company has reported three straight years of losses and declining revenue. It has eliminated jobs and taken other actions to cut costs.

In December, Avon agreed to pay $135 million to settle criminal and civil charges after its China unit pleaded guilty to conspiring to violate the Foreign Corrupt Practices Act by bribing officials there.

Still, the filing that contained the bid raised red flags almost immediately.

In addition to typos and garbled sentences, language used in the filing match almost word for word the language used by a legitimate company, TPG Capital, a major private equity firm based in Fort Worth, Texas, to describe itself on its website.

PTG Capital Partners in its filing listed as its law firm Trose & Cox and an attorney named Michael Trose. The firm’s address was given as 777 Main Street in Fort Worth, Texas.

The manager of that building said Thursday that no one with either name had ever been a tenant there.

Shares of Avon Products Inc. were still 5 percent higher in afternoon trading.

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