Penn Virginia Rhymes With Avon
It might be no coincidence that the Penn Virgina ticker PVA in reverse is the same as Avon's AVP. Recall the shenanigans at AVP from last month, where it received a bogus bid from PTG Capital.
Well, it wasn't so much a bogus bid that sent shares of Penn Virgina spiking last week as it was a 13-year old press release and letter from Boone Pickens' BP Capital to buy Penn Virgina. The deceptive thing was that the letter from Boone's BP was dated June 25, but it happened to be from 2002. The media, however, took it as the oil and gas Supermajor, British Petroleum, as being interested in Penn Virginia.
Granted, that doesn't mean there's not a buyout in the works. Earlier this year, Penn Virginia did say it was exploring a sale.
The one big difference between the rumors last week and the BP letter from 2012 is that the recent buyout rumors have the acquisition price at $8 a share. Back in 2012, BP Capital wanted to buy Penn Virginia for $40 a share. From Pickens' letter:
We propose a negotiated transaction whereby the entire equity interest in PVA would be acquired by us for $40 cash for each presently outstanding share. This cash price reflects a 20% premium over recent trading levels. We believe that this premium will be well received by the shareholders of PVA as a full and fair price for their shares.
Of note, Proactive Investors stands by the fact that Penn Virginia has received an $8 buyout offer from BP and rejected it. This even prompted Lone Star Value (with a 2.8% stake) to publicly take Penn Virginia to task over rejecting such an offer.