Activist Marcato Capital Pressures Sotheby’s on CFO, Buybacks

Feb 20 2015 | 6:00pm ET

Activist hedge fund Marcato Capital Management is pushing Sotheby’s to repurchase $500 million in stock immediately and find a new CFO.

In a letter penned to Dominico De Sole, an independent director of the company, Marcato cites disappointing return on capital and “willful neglect” of both the company’s management and the Finance Committee of the board. In particular, Marcato is seeking the removal of Sotheby’s CFO Patrick McClymont from his position.

Mick McGuire, who worked with Bill Ackman at Pershing Square before heading out on his own, started Marcato in 2010. The fund is the second-largest shareholder of the storied auction house, with a 7.4% stake, behind the 9.6% owned by Daniel Loeb’s Third Point. 

Loeb, a fellow activist, holds a seat on the same board Marcato is accusing of neglect. Loeb joined the company’s board of directors following a proxy battle last year.  

Sotheby’s has suspended capital returns to shareholders while it searches for a new CEO. The prior chief executive, William Ruprecht, departed last November under pressure from activist shareholders, including Loeb.

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