Who's calling Avon? Shares spike on mystery acquisition offer

(Reuters) - Shares of AVON (AVP.NY)Products Inc soared as much as 20 percent after an apparently non-existent firm based in a remote archipelago in the Indian Ocean said it had offered to buy the cosmetics company for almost three times its market value.

Avon said it had not received any such offer.

The purported acquirer, which identified itself as PTG Capital Partners, said in a filing with the U.S. Securities and Exchange Commission on Thursday it would pay $18.75 per share for Avon. (http://bit.ly/1A2HwEy)

Attempts to reach contacts listed in the filing - the law firm of Trose & Cox in Texas and the company itself in London - were unsuccessful. The U.S. Securities and Exchange Commission had no immediate comment on the veracity of the filing.

In a statement referring to PTG, Avon said it "has not received any offer or other communications from such an entity, and has not been able to confirm that such an entity exists."

The filing contained multiple errors of grammar, and PTG also called itself TPG in places. TPG, a prominent private equity firm in Fort Worth, Texas, said it is unrelated to PTG.

The filing also lifted chunks of text from TPG's website to describe itself and provided a contact address similar to TPG's in Fort Worth.

Shares of Avon rose as high as $8 before trading up 5.5 percent at $7.04 at mid-afternoon.

"Some people made a lot of money and some people lost a lot of money," said Seth Setrakian, partner and co-head of U.S. equities at First New York Securities.

"There's never a refund or a money back guarantee. I haven't found it yet."

More than 61 million Avon shares changed hands, mostly after news of the filing broke. The stock was halted on three separate instances due to their volatility after the initial reports.

"This was false information; it may be incredibly difficult to ascertain whomever was selling stock at those prices, who was the guilty party. So they should cancel all trades, that would be the fair thing to do," said Stephen Massocca, chief investment officer at Wedbush Equity Management LLC in San Francisco.

"I don't know why they are letting it trade. This is an error in regulation."

A spokeswoman for the New York Stock Exchange, where Avon is listed, had no comment.

According to the SEC's Edgar company database, PTG is based in British Indian Ocean Territory, an archipelago between Africa and Indonesia. A spokesman for the UK Foreign Office said there is no corporate register in this territory.

RBC Capital Markets analysts expressed surprise that an acquirer would pay more than $8 billion for Avon given its $2.9 billion value when the market opened on Thursday.

(Reporting by Siddharth Cavale and Yashaswini Swamynathan in Bengaluru, Tom Bergin and Martinne Geller in London and Sinead Carew, Rodrigo Campos and Chuck Mikolajczak in New York; Editing by Ted Kerr and Richard Chang)

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