Loeb Blasts Sotheby's Poison Pill As 'Relic From The 1980s'

Oct 7 2013 | 9:43am ET

Third Point's Daniel Loeb ratcheted up his rhetoric in his battle with auction-house Sotheby's.

The New York-based hedge fund last week launched a campaign to oust Sotheby's CEO William Ruprecht, who Loeb said lacked "leadership and strategic vision." Sotheby's responded by adopting a poison-pill that would prevent Third Point from buying more than 10% of its shares.

That did not sit well with Loeb, who called the move "a relic from the 1980s" and a "disproportionate response to the valid concerns expressed in our Oct. 2 letter."

"Rather than address our well-documented citations of mismanagement and initiate a constructive dialogue with its largest shareholder, the board and CEO have attempted to further entrench themselves," Loeb wrote, adding "it is clear that today, the chief executive officer and his hand-picked directors have put their job security ahead of shareholders."

In addition to Ruprecht's exit, Loeb is seeking a board seat for himself and the addition of other new directors. Sotheby's called the approach "incendiary and baseless." But Loeb made clear he was ready to go to war.

"Given their personal interests and miniscule shareholdings of Sotheby's, the board's actions—disenfranchising its owners who may wish to acquire a more significant stake—come as no surprise," Loeb wrote. "We hope this will be the Ruprecht board's final snub to its shareholders. It would be unfortunate if they instead refuse to undertake a fresh start until one is imposed upon them during proxy season."

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