Dan Loeb and his fund Third Point have slightly upped their activist position in Sothebys (NYSE:BID) and proposed several candidates, including Mr. Loeb to be elected on the company’s board. According to a newly amended filing with the SEC, Third Point currently holds 6.55 million shares, versus 6.35 million held previously. The position amasses 9.53% of the Sotheby’s common stock.
Moreover, Third Point stated in the filing that Daniel Loeb, Harry J. Wilson, and Olivier Reza have been nominated to be elected for the Sothebys (NYSE:BID)’s Board of Directors at the 2014 Annual Meeting.
Mr. Loeb went activist on Sotheby’s in October, 2013, when Third Point revealed boosting it’s stake to 6.35 million shares, from around 3.9 million held previously. Amid this move, the board of the company adopted a ‘poison pill’ to prevent certain shareholders from gaining control on the company. Third Point considers that the ‘poison pill’ was adopted to protect the members of the board, which collectively own less than 1% of the company.
“We believe the pill has been put into place solely to entrench the current Board and is wrongful. As a response to shareholder demands for increased transparency and accountability, the pill demonstrated that this Board’s paramount interest is in ensuring its members are protected rather than maximizing value by considering shareholders’ (evidently valid) suggestions for improvement,” Third Point says in the filing.
According to the investor, the Board has to undertake several measures such as cost-cutting and leveraging of Sothebys (NYSE:BID)’s brand. The current Board has been superficially treating these matters and no member of the Board has a track record in this type of restructuring, the statement added.
Earlier in October, Mr. Loeb sent a letter to the company’s CEO, William F. Ruprecht, in which it expressed its concern related to the strategic direction of the company and its weak operating margins. At the same time, the investor stated that Sothebys (NYSE:BID) has a competitive disadvantage of its auction house peer, Christie’s.
In the current filing, Third Point states that Sotheby’s has taken some actions related to the matters mentioned above and focused on returning capital to shareholders and is considering the sale of its London and New York headquarters, which will optimize the company’s balance sheet.
Aside from Third Point, another significant investor of Sothebys (NYSE:BID) is Richard Mcguire‘s Marcato Capital Management, which owns almost 4.6 million shares, as at the end of last year. James Dinan‘s York Capital Management also holds a major position, which amasses over 3.0 million shares. Both shareholders boosted their stakes during the fourth quarter of 2013, by 36% and 50% respectively.
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