Third Point Sues To Sink Sotheby’s Poison Pill

Mar 26 2014 | 1:36pm ET

Third Point has nominated three candidates the Sotheby’s board of directors, and it would like to improve their chances of winning.

The New York-based activist hedge fund filed suit against the auction house yesterday, seeking to have its poison pill provision invalidated. Sotheby’s adopted the measure, which bars non-passive investors from buying more than 10% of the company’s shares, in October, in response to Third Point’s initial approach. The hedge fund owns a 9.6% stake in Sotheby’s.

Third Point chief Daniel Loeb blasted the move as “a relic from the 1980s” at the time, and now says it is something more serious: “an improper attempt by the directors of Sotheby’s to entrench themselves in office and to hinder Third Point’s or any other stockholder’s ability to run an effect proxy contest,” the hedge fund said in its lawsuit.

Third Point has blasted Sotheby’s “chronically weak operating margins” and called on the company to increase its focus on modern and contemporary art. It has also demanded the ouster of CEO William Ruprecht. Loeb nominated himself and two others for election to the Sotheby’s board last month. The three were dismissed by Sotheby’s earlier this month.

Sotheby’s defended its poison bill, calling the board’s decisions “to adopt and maintain the 12-month rights plan are both valid and legal. The plan is designed to limit the ability of any person or group to seize control of the company without appropriately compensating all Sotheby’s shareholders.”


In Depth

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...

 

From the current issue of