-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TGewSaTdIsdVdnu/hxhOjh+FJ5Pf1ubhedwhNcY9kQR/tSfgRxD+ibllB6vJWTD3 XaWLVKSI0I3tHdfFvcXd+g== 0000899140-02-000778.txt : 20021018 0000899140-02-000778.hdr.sgml : 20021018 20021018092853 ACCESSION NUMBER: 0000899140-02-000778 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20021018 GROUP MEMBERS: DANIEL S. LOEB 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: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-12730 FILM NUMBER: 02792100 BUSINESS ADDRESS: STREET 1: 100 MATSONFORD ROAD SUITE 200 STREET 2: ONE RADNOR CORPORATE CENTER CITY: RADNOR STATE: PA ZIP: 19087 BUSINESS PHONE: 6106878900 MAIL ADDRESS: STREET 1: 100 MATSONFORD ROAD SUITE 200 STREET 2: ONE RADNOR CORPORATE CENTER CITY: RADNOR STATE: PA ZIP: 19087 FORMER COMPANY: FORMER CONFORMED NAME: VIRGINIA COAL & IRON CO DATE OF NAME CHANGE: 19670501 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: THIRD POINT MANAGEMENT CO LLC CENTRAL INDEX KEY: 0001040273 IRS NUMBER: 133922602 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 12 EAST 49TH ST STREET 2: 28TH FL CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2122247400 MAIL ADDRESS: STREET 1: 12 EAST 49TH ST STREET 2: 28TH FL CITY: NEW YORK STATE: NY ZIP: 10017 SC 13D/A 1 tpm1112960b.txt AMENDMENT NO. 4 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 4)* Penn Virginia Corporation ------------------------------------------------------------ (Name of Issuer) Common Stock, $6.25 par value ------------------------------------------------------------ (Title of Class of Securities) 707882106 ------------------------------------------------------------ (CUSIP Number of Class of Securities) Daniel S. Loeb Third Point Management Company L.L.C. 12 East 49th Street, 28th Floor New York, NY 10017 (212) 224-7400 ------------------------------------------------------------ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) Copies to: Jack H. Nusbaum, Esq. Willkie Farr & Gallagher 787 Seventh Avenue New York, NY 10019-6099 (212) 728-8000 October 15, 2002 ------------------------------------------------------------ (Date of Event which Requires Filing of this Schedule) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box: [ ] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 240.13d-7 for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D - ------------------------------------ ------------------------------------ CUSIP No. 707882106 Page 2 of 9 Pages - ------------------------------------ ------------------------------------ - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Daniel S. Loeb - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* N/A - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 NUMBER OF ----------------------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 880,000 EACH ----------------------------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 0 ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 880,000 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 880,000 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.84% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- SCHEDULE 13D - ------------------------------------ ------------------------------------ CUSIP No. 707882106 Page 3 of 9 Pages - ------------------------------------ ------------------------------------ - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Third Point Management Company L.L.C. I.D. #13-3922602 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* N/A - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 0 NUMBER OF ----------------------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 880,000 EACH ----------------------------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH 0 ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 880,000 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 880,000 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.84% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - -------------------------------------------------------------------------------- This Amendment No. 4 to Schedule 13D (this "Amendment No. 4") is being filed on behalf of Third Point Management Company L.L.C., a Delaware limited liability company (the "Management Company"), and Daniel S. Loeb, an individual ("Mr. Loeb" and, together with the Management Company, the "Reporting Persons"). Amendment No. 4 relates to the common stock, par value $6.25 per share, of Penn Virginia Corporation, a Virginia corporation (the "Company"), and further amends the Schedule 13D filed by the Reporting Persons with respect to the Company on February 28, 2002 (the "Schedule 13D"). Unless the context otherwise requires, references herein to the "Common Stock" are to such common stock of the Company. The Management Company is the investment manager or adviser to a variety of hedge funds and managed accounts (such funds and accounts, collectively, the "Funds"). The Funds directly own the Common Stock to which this Amendment No. 4 relates, and the Reporting Persons may be deemed to have beneficial ownership over such Common Stock by virtue of the authority granted to them by the Funds to vote and to dispose of the securities held by the Funds, including the Common Stock. Capitalized terms used herein and not otherwise defined have the meanings ascribed thereto in the Schedule 13D. 4 Item 3. Source and Amount of Funds or Other Consideration. The Funds expended an aggregate of $5,291,210.24 of their own investment capital to acquire the 172,400 shares of Common Stock referenced in Schedule A hereto. The Shares were acquired in open market purchases on the New York Stock Exchange. Item 4. Purpose of Transaction. Item 4 of the Schedule 13D is hereby amended by the addition of the following: As further detailed in a letter, dated October 17, 2002, from Mr. Loeb to the President and Chief Executive Officer of the Company, a copy of which is attached hereto as Exhibit 1 and incorporated herein by reference, the Reporting Persons believe that the implementation of a share repurchase program by the Company using its excess capital to repurchase its shares on the open market would significantly enhance shareholder value. In addition, for the reasons set forth in Mr. Loeb's letter, the Reporting Persons reiterated their request that the Company repeal both its "Dead Hand" poison pill and its limitation on ownership of the Company's shares above a 10% threshold. The Reporting Persons believe that the Company's oil and gas assets are significantly undervalued and have encouraged the Company to retain financial advisors to explore options to maximize shareholder value, including the possible sale of the Company. 5 Should the Company fail to take the actions described above, the Reporting Persons have indicated to the Company that they are studying the feasibility of waging a proxy contest to replace members of the Company's board of directors. Except as set forth above, in Exhibit 1, and in the Schedule 13D, the Reporting Persons do not have any present plans or proposals that relate to or would result in any of the actions required to be described in Item 4 of Schedule 13D. Each of the Reporting Persons may, at any time, review or reconsider its position with respect to the Company and formulate plans or proposals with respect to any of such matters, but has no present intention of doing so. Item 5. Interest in Securities of the Issuer. Item 5 of the Schedule 13D is hereby amended by the addition of the following: (a) As of the date of this Amendment No. 4, the Reporting Persons beneficially own 880,000 shares of Common Stock. (b) The Management Company and Mr. Loeb share voting and dispositive power over the 880,000 shares of Common Stock held directly by the Funds. (c) Schedule A hereto sets forth certain information with respect to transactions by the Funds, at the direction of the Reporting Persons, in the Common Stock since the most recent filing on Schedule 13D, dated as of August 9, 2002. 6 All of the transactions set forth on Schedule A, except as may be otherwise noted therein, were effected in open market purchases on the New York Stock Exchange through the Primary Broker. Except as set forth above, since the most recent filing on Schedule 13D, there were no transactions in the Common Stock effected by the Reporting Persons, nor, to the best of their knowledge, any of their directors, executive officers, general partners or members. Item 7. Material to be Filed as Exhibits. 1. Letter from Daniel S. Loeb to Mr. A. James Dearlove, President and Chief Executive Officer of the Company, dated October 17, 2002. 7 SIGNATURES After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. Dated: October 17, 2002 THIRD POINT MANAGEMENT COMPANY L.L.C. By: /s/ Daniel S. Loeb ---------------------- Name: Daniel S. Loeb Title: Managing Member Dated: October 17, 2002 /s/ Daniel S. Loeb ---------------------- Daniel S. Loeb Schedule A ---------- (Transactions by the Funds in Common Stock since the most recent filing on Schedule 13D) Shares Shares Price Date Purchased Sold Per Share - ---- --------- ------ --------- 08/30/02 7,256 $35.1000 08/30/02 (7,256) $35.1000 09/24/02 75,000 $29.5000 09/30/02 12,571 $32.4000 09/30/02 (12,571) $32.4000 10/15/02 90,000 $31.6000 10/16/02 7,400 $31.7176 EX-1 4 tpm1112960c.txt LETTER Exhibit 1 --------- VIA FACSIMILE & U.S. MAIL October 17, 2002 Mr. A. James Dearlove President & C.E.O. Penn Virginia Corporation One Radnor Corp Center, Suite 200 100 Matsonford Road Radnor, PA 19087-4515 Dear Mr. Dearlove: I am writing to inform you that we have recently acquired additional Penn Virginia (the "Company") shares bringing our holdings to 9.8 % of the outstanding shares and making us the Company's largest shareholder. While we are confident that the assets controlled by the Company remain significantly undervalued (particularly in light of the recent rise in natural gas prices), such confidence does not extend to your management. Our meeting with you and your attorney on October 3, 2002 only increased our concern that you appear to place your own economic interest and your job security over the interests of your shareholders. In particular, we note your miniscule shareholdings of 30,000 shares and generous option awards. We believe that your meager economic interest coupled with a disproportionate options interest provides you with an incentive to pursue high-risk "pie in the sky" exploration adventures or ill-advised acquisitions such as Synergy. It is our firm belief that Penn Virginia should use a significant portion of its free cash to purchase its own shares in the open market, a view expressed to you by other shareholders as well. When I first suggested this to you on a conference call, you stated the opinion that share repurchases conducted by small capitalization companies do not create shareholder value. As support for your view you cited a study by the University of Illinois. We acquired a copy of the study, which was prepared by a graduate student, and did not find the arguments convincing. Based on our own experience investing in small capitalization stocks for seven years, we can point to numerous examples of companies that significantly enhanced their value by deploying excess capital to repurchase their own shares. To begin, innumerable savings and loans, particularly those that converted from mutual form to stock form, experienced significant gains. I also suggest you look at the long term charts of companies such as NV Ryan, MDC Holdings, Annaly Mortgage, and ChemFirst Inc. for examples of small capitalization companies that have steadily created shareholder value via share repurchase programs. These companies, not coincidentally, are run by individuals who have significant holdings in their companies. In your own industry, two examples of well-run companies that have used capital to repurchase their shares are Patina Oil & Gas and Plains Resources. Over the past 5 years from October 17, 1997 to October 17, 2002, Patina shares have risen 265%; Patina's Chief Executive owns 1.96 million or 8.75% of the outstanding shares. Plains Resources shares have risen 27% over the same 5 year period. Its chief executive has taken options in lieu of salary. During this same period, Penn Virginia's shares have risen just 2.8%. Accordingly, we reiterate our demands that the Company institute a share repurchase program and immediately begin a program of repurchasing its shares. We reiterate our criticism of the Company's corporate governance and recently amended poison pill. We believe the adoption of a so-called "Dead Hand" pill (illegal in Delaware, the state with the most highly developed corporate state law) is in extremely bad faith with regard to prudent corporate governance. Any pill that can only be rescinded or modified by the same directors is grossly unfair. This pill has been widely discredited and criticized by institutional shareholders such as Calpers. In addition, the newly established 10% threshold is highly restrictive and potentially harmful to both the share price and to all shareholders given the draconian consequences of tripping the pill. Frankly, your enactment of the Dead Hand Pill reminds me of Fidel Castro's recent referendum to preserve Communism as the official government of his country even after he leaves the government. I do not believe that a Board of Directors that believes in democratic principles would endorse such a measure. As your largest shareholder, we insist that you repeal the Dead Hand pill and do away with a cap on the number of shares that may be held by your shareholders. Based on our own analysis and discussions with other analysts and executives in your industry, the Company's oil and gas assets are severely undervalued. The recent strength in oil and gas markets and a $4.25 / Mcfe Henry Hub price suggests this is an opportune time to market oil and gas assets. Many E&P companies currently seek to replace their reserves through acquisition rather than internal development. Your recent Synergy experience and its skyrocketing finding costs will undoubtedly confirm this logic. We would not want Penn Virginia to miss this ripe market opportunity. Anadarko Petroleum's recent acquisition of Howell Corp. would provide a healthy baseline data point for what PVA shares are potentially worth. At $.83 per Mcfe, this would price PVA shares in the low $40s. We believe the quality of PVA reserves is superior to those of Howell. As you know, you objected to our bringing a potential corporate buyer to our meeting earlier this month. Accordingly, we encourage the Company to retain an investment banker to explore options to maximize shareholder value, including the possible sale of the Company. We believe that, based on our discussions with other significant shareholders, your owners would support such action to be taken. Your reluctance to give serious consideration to our prior proposals leaves us with no other alternative as fiduciaries but to take steps to protect our investment and to explore the possibility of making changes to management and to the Board of Directors. Accordingly, we are currently studying the feasibility of waging a proxy contest to replace the Board with members who are more in tune with their shareholders desire to maximize value. Unlike other activist shareholders who were worn out by your intransigence, trust me that we will not go away. I hope you will reassess your position and consider the suggestions made by your largest shareholder. I look forward to hearing from you. Sincerely, /s/ Daniel S. Loeb Daniel S. Loeb -----END PRIVACY-ENHANCED MESSAGE-----