Sotheby’s (BID) Stock: Marcato Capital Agrees To Sell 2.05 Million Shares Back to Auctioneer

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Richard McGuire‘s Marcato Capital Management recently filed an amended Form 13D with the Securities and Exchange Commission, in which it reported signing both a Share Repurchase Agreement and a Confidentiality Agreement with Sotheby’s (NYSE:BID) on October 3. In addition, the filing showed that Marcato Capital Management holds 2.62 million shares of Sotheby’s, which amass 4.9% of the company’ stock. The fund’s stake has been lowered from 5.27 million shares that it held at the end of June, as per its latest 13F filing.

In the Repurchase Agreement, Marcato Capital agreed to sell 2.05 million shares back to the company, at a price of $36 per share, while in the Confidentiality Agreement, Sotheby’s granted the fund access to certain information needed for it to evaluate its decision as to whether or not to sign the Share Repurchase Agreement. Also, upon the Confidentiality Agreement, Marcato Capital agreed not to sell, trade in, or acquire any shares of the company until two business days after Sotheby’s releases its financial results for the third quarter of 2016.

Sotheby’s (NYSE:BID)’s is a global art business company, which runs two divisions: Finance and Agency. Year-to-date, the company’s stock is up by 47.17%. In its financial report for the second quarter of 2016, Sotheby’s reported diluted earnings per share of $1.52 and revenue of $298.67 million, compared to EPS of $0.96 and revenue of $332 million for the same period of 2015. Recently, Cowen and Company increased its price target on Sotheby’s stock to $38 from $36, with having a ‘Hold’ rating on it.


Of the 749 hedge funds that we track which filed 13Fs for the June quarter, 16 reported having long positions in Sotheby’s (NYSE:BID) as of the end of June, down by six from the end of March. Among the bullish investors were Dan Loeb’s Third Point, which held a position valued at $182.51 million, John W. Rogers’ Ariel Investments, with a position worth $33.75 million, Steve Cohen’s Point72 Asset Management, Ken Fisher’s Fisher Asset Management, and Chuck Royce’s Royce & Associates.

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Some of the investors who lost optimism for investing in Sotheby’s and decided to sell off their positions during the June quarter included Jim Simons’ Renaissance Technologies, which said goodbye to a $7.70 million position, Ken Griffin’s Citadel Investment Group, which dumped its position valued at $2.56 million on March 31, Alec Litowitz and Ross Laser’s Magnetar Capital, David Brown’s Hawk Ridge Management, and Benjamin A. Smith’s Laurion Capital Management.

You can access the original SEC filing by clicking here.

Ownership Summary Table

Name Sole Voting Power Shared Voting Power Sole Dispositive Power Shared Dispositive Power Aggregate Amount Owned Power Percent of Class
MARCATO CAPITAL MANAGEMENT 0 2,620,048 0 2,620,048 2,620,048 4.9%
RICHARD T. MCGUIRE III 0 2,620,048 0 2,620,048 2,620,048 4.9%
MARCATO 0 718,616 0 718,616 718,616 1.4%
MARCATO II 0 71,845 0 71,845 71,845 0.1%
MARCATO INTERNATIONAL MASTER FUND, LTD 0 1,829,587 0 1,829,587 1,829,587 3.4%

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Page 1 of 9 – SEC Filing



Washington, D.C. 20549




Under the Securities Exchange Act of 1934

(Amendment No. 12)*




(Name of

Common Stock, par value $0.01 per share

(Title of Class of Securities)


(CUSIP Number)

Richard T. McGuire III

Marcato Capital Management LP

Four Embarcadero Center, Suite 2100

San Francisco, CA 94111

(415) 796-6350

Address and Telephone Number of Person Authorized to Receive Notices and Communications)


Jeffrey L. Kochian, Esq.

Akin Gump Strauss Hauer & Feld LLP

One Bryant Park

York, NY 10036

(212) 872-1000

October 3, 2016

(Date of Event Which Requires Filing of This Statement)



If the filing person has
previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following
box ☐.

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule §240.13d-7
for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting persons initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information
which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be
deemed to be filed for the purpose of section 18 of the Securities Exchange Act of 1934 (Act) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).

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