George Soros Wants Penn Virginia Corporation (PVA) to be Sold

In a newly amended filing with the U.S. Securities and Exchange Commission, Soros Fund Management, managed by George Soros, has disclosed a letter sent to the boards of the directors of Penn Virginia Corporation (NYSE:PVA). In the letter, the fund reiterated its view that the best path to maximize share value would be for the company to be sold.

According to the filing, Soros Fund Management currently owns 6.25 million shares of the company’s common stock, representing an increase from 6.00 million shares disclosed previously. The new position is equal to 9.53% of the stock.

Penn Virginia Corporation (NYSE:PVA) is an independent oil and gas company engaged in the exploration, development and production of oil, natural gas liquids and natural gas in various domestic onshore regions of the United States, with a primary focus in south and east Texas. The company has a market cap of $1.04 billion.

In the filing, Soros Fund states that it is disappointed with Penn Virginia’s rejection of its suggestions that the company provide additional financial incentives to its management team to align their interests with the company’s shareholders in the event of a sale.

“As the largest shareholder of Penn Virginia, we are deeply concerned by the Company’s recent missteps. Management’s presentations at several recent conferences have been underwhelming, culminating in a wholly avoidable revision of its investor presentation type-curve disclosure. We believe that these investor relations disasters are the reason why the Company’s stock dropped 14.4% from $16.48 on May 29, 2014 to $14.11 on June 10, 2014, underperforming its peer companies by 15% over that period.” according to the letter.

In addition, Soros Fund states in the letter that the Penn Virginia’s board of directors has presided over a long period of decline in the share price, which further supported its view that the company should pursue a sale.

Moreover, the investor reserved the right to take any and all actions it believes necessary to ensure that shareholder value is not further eroded if the company fails to pursue a sale.

Recently, Penn Virginia Corporation (NYSE:PVA) conducted its private offering to eligible holders of 2.75 million depositary shares. Shares of the company traded up 12.93% on Wednesday to $16.68. For the company’s stock, analysts have the consensus average target price of $20.79, and have the consensus average recommendation of ‘buy.’

The full text of the letter is available below:

Soros Fund Management Letter to Penn Virginia

Disclosure: none