IN THEORY, all 5,400 listed firms on America’s equity markets are always for sale. In reality, bids rarely come out of the blue. That may explain why a notice posted on May 14th on the website of America’s main stockmarket regulator, the Securities and Exchange Commission (SEC), of a ludicrously high bid for Avon Products, a beleaguered door-to-door cosmetics company, prompted investors to buy first and ask questions later.
By the time the soaring share price had forced three trading halts on the New York Stock Exchange, those who had bothered to read the relevant filings closely were ready for Avon’s shares to plunge, as they duly did. The bidder, whose announcement the SEC posted automatically, claimed to be incorporated in the British Indian Ocean Territory, home to more long-range bombers than corporate raiders. Its name, PTG, was a play on TPG, a big private-equity firm.
Eventually, Avon announced that it had not heard from any would-be buyer, and that it was not even sure PTG existed. (Curiously, after the hoax was exposed, Avon’s share price came to rest above its...Continue reading
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