On 8/14,Trian Fund Management, L.P. disclosed in their 13-F a new 2.1 mm share ownership stake in Sothebys (NYSE:BID), or roughly 3% of total diluted shares. Third Point also raised its stake by additional 2 mm shares (from 500k shares to 2.5 mm shares). Based on previous filings – shares & options about 7% – from Marcato Capital Management LLC (which cited potential initiatives for improving capital structure and/or capital allocation).

third point sothebys

Today 8/26, Third Point LLC disclosed a 5.7% ownership stake in BID (vs. a 3.6% stake prior) through a Schedule 13D, with the intention to engage in a dialog with the company. The filing cites dialog may relate to potential changes in strategy and leadership at BID.

David A. Schick , Taylor G. LaBarr and Raymond L. Stochel of Stifel Nicholas note in a new report today that they believe there is both real estate, operational, and cash flow to shareholder value to be unlocked at BID.

Furthermore, the analysts state:

Actually shareholders, management, customers, and employees might all be served best by a private Sothebys (NYSE:BID) – and we think this would have many intriguing characteristics as a trophy asset. We believe market value is potentially greater than book value for the York Ave. office given recent NYC property sales, and strategic buyers in the area that could help drive up the price offered.

We also note moving from 500k square feet to “several hundred thousand” indicates that BID may be intending to move storage and back-office functions to a less expensive location. We see greater visibility and closer access to a major commuter hub versus their current location on the Upper East Side. Additionally, the London space on Bond Street may have even more of an opportunity.

With the company now facing three activist hedge funds with a large stake in BID, big changes could be on the horizon.