George Soros is going activist on Penn Virginia Corporation (NYSE:PVA). He filed a 13D with the Securities and Exchange Commission disclosing a nearly 10% stake in the company and stating that he recommends to management that the company be sold immediately.
George Soros buys Penn Virginia options
According to the regulatory filing, Soros Fund Management bought 250,000 shares of Penn Virginia Corporation (NYSE:PVA) at just under $15 a share. George Soros holds about 6.25 million shares of the company, including options to buy 250,000 more shares. That amounts to a stake of about 9.53% in Penn Virginia.
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The filing states that the only purchase of Penn Virginia Corporation (NYSE:PVA) shares Soros Fund Management has made within the last 60 days is the 250,000 call options. The firm bought those call option contracts on June 6 with a July 19 expiration date and $17 strike price.
George Soros writes to Penn Virginia management
In the filing, Soros also states that his firm sent a letter to Penn Virginia Corporation (NYSE:PVA) once against saying that they believe that the best way for the company to maximize shareholder value is for it to sell itself. He said he was disappointed with Penn Virginia’s rejection of his suggestions that the company offer more financial incentives to its management to ensure that their interests are aligned with those of the company’s shareholders if there is a sale.
Soros says Penn Virginia made mistakes
George Soros also named a handful of what he sees as missteps made by the company. For example, the firm said Penn Virginia Corporation (NYSE:PVA) failed in making recent presentations to investors, resulting in its stock price declining. The filing also states that Penn Virginia’s private convertible preferred stock offering diluted existing shareholders by about 21% because the preferred shares were offered at a significant discount. In addition, Soros states that the intended use of the proceeds from that offering was wrong as well.
The firm also states that Penn Virginia Corporation (NYSE:PVA)’s board of directors has been heading up the company during a “long period of decline” in the company’s share price. The filing states that George Soros believes this supports the view that Penn Virginia should explore a sale. In addition, Soros reserves the right to “take any and all actions it believes necessary to ensure that shareholder value is not further eroded if the Issuer fails to pursue a sale.”