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

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Dec 21 2014 | 10:30am ET

Texan Allen Stanford first appeared on the radars of financial regulators in 1997...

Lifestyle

Hedgie Funds US Squash Program

Dec 24 2014 | 8:46am ET

Squash, anyone?

Guest Contributor

EidoSearch’s Top Three Market Projections For 2015

Dec 23 2014 | 4:03am ET

It is that time of year again when prognosticators make their big market calls for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.