Does Arabian Peninsula Group Even Exist?
No deal and possibly no company
Most people interested in Harman International Industries Inc. already know that the company says it has not received a buyout offer from Arabian Peninsula Group. Rumors about the alleged buyout offer spread pretty far pretty fast. Reuters says:
Several media outlets on Sunday received faxed statements that said a private investment firm called Arabian Peninsula Group (APG) planned to buy Harman for $49.50 a share — double the high-end audio equipment maker’s Friday close of $25.18.
Although the fax quoted an executive from Arabian Peninsula Group named Donald Parker, there was no contact information. Harman says it has never heard of Arabian Peninsula Group, and so far it appears that no one else has either.
Yea or nay? Hard to say
Reuters says it’s difficult to verify whether Arabian Peninsula Group is a real company because Kuwait has no financial regulator. The area code that the fax supposedly came from was a Kuwait code.
In the United States it is easy to verify every type of business — from a payday loan company to a pet store — because businesses must have a license. However, the same level of regulation isn’t present in Kuwait, so it’s harder to verify a business’s legitimacy.
Not the first time
Reuters also reports that similar scenarios have happened before:
The incident is similar to one in April when an alleged offer from a United Arab Emirates-Kuwait consortium for diversified U.S. manufacturer Textron Inc (TXT.N) sent its shares up 47 percent. No deal ever materialized.
In both cases, a person identifying himself as a fund manager had called newsrooms touting the stories, but refusing to give contact numbers.
Fake news, real results
Though it now seems almost certain that this alleged buyout deal was a hoax, the news certainly had some real results on the stock market. The Wall Street Journal reports:
The denial sent shares slumping when the market opened, and they were recently down 8.7% to $22.98. Nearly four times the typical number of shares have changed hands on Monday. In premarket trading the shares spiked as high as $38, which would have been the highest intra-day trade since last August and the stock’s first time above $30 since October.
More searches for Arabian Peninsula Group
I know it’s not really a good yardstick, but I have a tendency to believe that anything that doesn’t exist on Wikipedia doesn’t really exist at all. Going by that logic, Arabian Peninsula Group does not exist.
Of course, by that logic I don’t really exist, either, so we’ll just call it another small piece of evidence. Also, after an intensive Google search, it doesn’t appear that Arabian Peninsula Group has a web site, which also speaks volumes about its validity, in my opinion.