Avon buyout bid likely phony
Trading interrupted after filing by entity that might not exist
Trading of struggling cosmetics maker Avon was intermittently halted Thursday on unsubstantiated reports it was the target of a potential investment or buyout.
There was no filing from Avon with the Securities and Exchange Commission. There was a filing — widely believed to be phony — from a PTG Capital.
Avon denied getting a bid. “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 commu- nication from such an entity and has not been able to confirm that such an entity exists,” it said.
An SEC filing lists PTG Capital Partners at an address in London. A call to the London phone number listed for PTG Capital Partners on a separate SEC filing about the purported Avon offer went straight to voice mail.
An electronic search of business formations and incorporations, federal court cases and other filings found no U.S. records for Trose & Cox, the name of an entity listed as related to PTG Capital Partners in the SEC record about the purported Avon offer. A phone number listed in the SEC record for Trose & Cox is associated with Atrium Executive Business Center in Fort Worth. A message left there was not immediately returned.
Nanex CEO Eric Hunsader, whose firm provides market data to the financial industry, said he analyzed Thursday market activity in Avon shares. The purported Avon offer was time-stamped at the SEC at 11:34:17.
There was no sharp jump in the shares until 94 seconds after the time stamp. The delay seems unusual, because algorithms used by market traders generally would have spotted the purported offer and acted on it far more quickly, Hunsader said. The stock’s rise and subsequent fall tripped three trading halts. The shares traded as high as $8 before closing up 6% at $7.07.
The SEC said filers could face enforcement actions if their filings are “false or misleading.”