fund manager Loeb says Sotheby's attacks on him are 'false'
Send a link to a friend
[April 15, 2014]
By Svea Herbst-Bayliss
BOSTON (Reuters) — Activist investor
Daniel Loeb, who is fighting to win control of three board seats at
Sotheby's, on Monday raised the temperature by saying the current
board has failed and that its attacks on him are "false" and
In a filing with the Securities and Exchange Commission, Loeb
responded to Sotheby's presentation of last week when the
270-year-old auction house questioned Loeb's ability to add value to
Loeb in his filing also took aim at the Sotheby's board for its
claims on the company's performance.
"Management's claim that 2013 was a 'record' year is misleading and
demonstrates the risk of having a Board asleep at the switch," Loeb
wrote. He noted that earnings per share fell by 42 percent between
2007 and 2013, and that revenues fell and expenses climbed over the
same time period.
Sotheby's declined to comment.
Loeb's $14.5 billion hedge fund Third Point currently owns a 9.6
percent stake in Sotheby's and started a proxy contest earlier this
year, putting Loeb and two other people forward as directors. Since
the middle of last year, Loeb and Third Point have been pushing the
company to overhaul its financial strategy, return capital to
investors and improve its position in the modern art market.
To some observers, the battle is being drawn along the same lines as
the 2012 battle for Yahoo, in which Loeb played an instrumental role
in pushing out Scott Thompson as chief executive and hand-picking
Marissa Meyer to run the company. The two sides negotiated a
settlement and Loeb joined Yahoo's board.
Sotheby's share price has fallen 21.33 percent since October 2013.
The company in October adopted a poison pill to prevent activist
investors from owning more than 10 percent, two days after Loeb
raised his stake in the company. Third Point has filed suit in
Delaware Chancery Court to try and force Sotheby's to withdraw the
poison pill. The next hearing is scheduled for April 26.
[to top of second column]
Loeb said Sotheby's was disingenuous in criticizing his exit from
Yahoo last year. Loeb said Yahoo's share price climbed more than 85
percent during the time he and two other directors close to Third
Point served on the board.
He also said that Sotheby's made "false statements" about his
experience in the art world. He said that as a prominent collector
he has loaned some of his personal collection to museums like the
Museum of Modern Art in New York.
Sotheby's annual meeting will take place on May 6, and before then
Loeb and Sotheby's will both try to persuade investors to their
side. Proxy voting advisory firm ISS is expected to make a
recommendation on which slate to pick in the coming days.
(Reporting by Svea Herbst-Bayliss; editing by Leslie Adler)
[© 2014 Thomson Reuters. All rights
Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.