0001013594-19-000226.txt : 20190306 0001013594-19-000226.hdr.sgml : 20190306 20190306165348 ACCESSION NUMBER: 0001013594-19-000226 CONFORMED SUBMISSION TYPE: DFAN14A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20190306 DATE AS OF CHANGE: 20190306 EFFECTIVENESS DATE: 20190306 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: PENN VIRGINIA CORP CENTRAL INDEX KEY: 0000077159 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 231184320 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DFAN14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-13283 FILM NUMBER: 19663157 BUSINESS ADDRESS: STREET 1: 16285 PARK TEN PLACE STREET 2: SUITE 500 CITY: HOUSTON STATE: TX ZIP: 77084 BUSINESS PHONE: 7137226500 MAIL ADDRESS: STREET 1: 16285 PARK TEN PLACE STREET 2: SUITE 500 CITY: HOUSTON STATE: TX ZIP: 77084 FORMER COMPANY: FORMER CONFORMED NAME: VIRGINIA COAL & IRON CO DATE OF NAME CHANGE: 19670501 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Mangrove Partners Master Fund, Ltd. CENTRAL INDEX KEY: 0001569227 IRS NUMBER: 981083428 STATE OF INCORPORATION: E9 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DFAN14A BUSINESS ADDRESS: STREET 1: MAPLES CORP. SVCS, PO BOX 309 STREET 2: UGLAND HOUSE, S. CHURCH STREET CITY: GEORGE TOWN STATE: E9 ZIP: KY1-1104 BUSINESS PHONE: 2128979537 MAIL ADDRESS: STREET 1: 645 MADISON AVE, 14 FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 DFAN14A 1 pennvirginiadfan14a-030619.htm MARCH 6, 2019
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934

(Amendment No.  )

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[  ] Preliminary Proxy Statement
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Rule 14a-6(e)(2))
[  ] Definitive Proxy Statement
[X] Definitive Additional Materials
[  ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

PENN VIRGINIA CORPORATION
(Name of registrant as specified in its charter)

THE MANGROVE PARTNERS MASTER FUND, LTD.
MANGROVE PARTNERS
NATHANIEL AUGUST
 (Name of person(s) filing proxy statement, if other than the registrant)


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The Mangrove Partners Master Fund, Ltd., together with the other participants named above (collectively, “Mangrove”), has filed with the Securities and Exchange Commission a definitive proxy statement and an accompanying proxy card to be used to solicit votes against the proposed merger between Penn Virginia Corporation, a Virginia corporation (“Penn Virginia” or the “Issuer”), and Denbury Resources Inc., a Delaware corporation (“Denbury”) at the upcoming April 17, 2019 special meeting of stockholders of the Issuer.

On March 6, 2019, Mangrove issued the following press release, attached hereto as Exhibit 99.1.


 EX-99.1 2 pennvirginiaex991-030619.htm LETTER TO SHAREHOLDERS
Mangrove Partners Files Definitive Proxy Statement and Releases Important Letter to Shareholders of
Penn Virginia Corporation

Urges Fellow Shareholders to Vote Against the Ill-Advised and Undervalued Merger with Denbury Resources, Inc. at the Upcoming April 17th Special Meeting


NEW YORK, March 6, 2019 -- The Mangrove Partners Master Fund, Ltd., one of Penn Virginia Corporation’s largest shareholders, owning 11.4% of the outstanding shares, today announced that it has filed its definitive proxy statement and released a letter to the shareholders of Penn Virginia Corporation (NASDAQ: PVAC).

The full text of the letter is copied below:

March 6, 2019

Dear Fellow Shareholders:

We write to ask you to join us in voting against the proposed merger between Penn Virginia Corporation (“Penn Virginia”) and Denbury Resources Inc. (“Denbury”) at the upcoming April 17th Special Meeting by voting AGAINST the merger proposals on the enclosed GOLD proxy card. The Mangrove Partners Master Fund, Ltd. and its affiliates (“Mangrove”) are long term shareholders owning 11.4% of Penn Virginia’s common stock. We strongly oppose the proposed merger and strongly believe the transaction, which is payable to Penn Virginia shareholders in a combination of both Denbury stock and cash, is not in the best interests of Penn Virginia shareholders.

Specifically, Mangrove believes that:

·
The proposed merger is terrible for Penn Virginia shareholders. Should the transaction be completed, the combined company would have a higher cost structure, lower margins, a reduced growth rate, a significantly weaker balance sheet, and a more expensive valuation than Penn Virginia currently enjoys on a standalone basis.

·
The proposed merger undervalues Penn Virginia. Since shortly after the merger was announced on October 28, 2018, Penn Virginia stock has persistently traded above the market value of the merger consideration. Rather than being paid a significant and sustainable premium, the proposed merger asks Penn Virginia shareholders to accept a discount to the current market value of Penn Virginia shares of over 12%.1


1 Based on closing prices as of March 5, 2019.
·
Denbury’s financial leverage represents an unacceptable risk for Penn Virginia shareholders. Mangrove believes that Denbury, with its high cost structure and $2.5 billion of net debt,2 may become insolvent should current or lower oil prices persist. This concern was on full display late last year as oil prices dropped into the $40s and the yield on Denbury’s unsecured notes spiked above 20%. Despite the recovery in oil prices to the mid $50s, Denbury’s bonds continue to trade at distressed levels with yields of approximately 15%.3 Denbury plans to incur over $900 million in additional debt as part of the proposed merger.

·
The shortcomings of the proposed merger were immediately recognized by the market and remain obvious. On the first trading day following the announcement, the common stock of Denbury Resources dropped 24% and underperformed the S&P Oil & Gas Exploration and Production Select Industry Index by over 20%. In the time since then, the decline in Denbury’s common stock has grown to over 57% and its underperformance to over 50%.4

Given these factors, we ask a simple yet fundamental question: what benefit does this merger provide to you as a Penn Virginia shareholder? We understand that the proposed merger may help to address Denbury’s excessive leverage and inability to grow, but we do not believe that helping Denbury with its problems is a relevant goal for Penn Virginia’s shareholders.

Penn Virginia’s Board of Directors may be contractually obligated to support this value-destroying transaction but you don’t have to. You are free to vote in your clear economic best interests. We strongly urge you to join us in voting against the proposed merger today.


2 As disclosed in Note 6 to Denbury’s 2018 Consolidated Financial Statements (see Denbury’s 2018 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 1, 2019 at pages 80-81). This amount excludes $250 million in future interest payments that are deemed debt under GAAP rules for troubled debt restructurings.
3 See supra, footnote 1.
4 See supra, footnote 1.

PROTECT YOUR INVESTMENT IN PENN VIRGINIA AND VOTE “NO” ON THE PROPOSED POORLY CONCEIVED TRANSACTION WITH DENBURY.

WE URGE YOU TO VOTE AGAINST THE TRANSACTION PROPOSALS BY SIGNING, DATING AND RETURNING THE ENCLOSED GOLD PROXY CARD TODAY.

IF YOU HAVE ALREADY VOTED FOR THE DENBURY MERGER PROPOSAL ON PENN VIRGINIA’S WHITE PROXY CARD, VOTING AGAINST ON A LATER DATED PROXY CARD WILL CANCEL YOUR PREVIOUSLY CAST VOTE.

Thank you for your support.


Nathaniel August
Mangrove Partners

If you have any questions or need assistance voting your shares AGAINST the Denbury merger proposal, please call Saratoga Proxy Consulting LLC at (212) 257-1311 or (888) 368-0379 or email at info@saratogaproxy.com.

About Mangrove Partners

Mangrove Partners is a value-oriented investment manager founded in 2010. Mangrove’s investment objective is to organically compound net worth while minimizing the chances of a permanent loss of capital.

Shareholder Contact:

Saratoga Proxy Consulting LLC
John Ferguson (212) 257-1311