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Penn Virginia-Denbury deal draws opposition from activist fund Mangrove Partners
14 November 2018 22:09
Activist fund Mangrove Partners disclosed on Wednesday that it met with senior management of Denbury Resources and Penn Virginia to express opposition to their deal and to convey that the fund "is not alone in disliking this transaction."
Mangrove said it informed the management teams that it intends to vote against the deal and will solicit proxies against the transaction. The fund said it has hired SEC counsel, and is interviewing proxy solicitors.
Mangrove, which holds a 9.5% stake in Penn Virginia, said the company is "a compelling standalone investment," but said Denbury Resources, combined with Penn Virginia, "is not of interest to Mangrove Partners."
Mangrove, in a filing with the Securities and Exchange Commission, said "other shareholders ... have reached out to Mangrove to express their dissatisfaction."
The fund said that Denbury shareholders appear to be likewise dissatisfied, driving Denbury's shares down more than 40% in the 12 trading days since the announcement of the deal.
"Mangrove believes that the market's reaction goes well beyond the typical arbitrage pressures following the announcement of a stock-for-stock transaction and reflects a rebuke of the transaction itself," the fund said.
Denbury has agreed to buy Penn Virginia, offering 12.4 of its shares and $25.86 for each Penn Virginia share.
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