Activist investor Dan Loeb can add another notch to his pistol grip, as Sothebys (NYSE:BID)’s management announced earlier today it was acceding to most of activist Loeb’s demands. The company released a statement today saying the ongoing dispute between Loeb and Sothebys (NYSE:BID) has been settled, with the activist investor’s firm being granted three seats on the venerable auction house’s board of directors. Adding three new directors will expand Sothebys’ BoD to 15.
The deal between the two also calls for Sothebys (NYSE:BID)’s to terminate its controversial shareholder rights plan (“poison pill“) at its annual shareholder meeting on May 6.
Furthermore, Third Point, which currently owns around a 9.6% stake of Sothebys (NYSE:BID)’s, can raise its ownership share up to 15% according to the deal. Sothebys’ had previously offered Loeb a seat on the company’s BoD, but Third Point rejected that as insufficient to bring about the change required to unlock shareholder value.
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Annual meeting Tuesday
Sothebys (NYSE:BID)’s annual meeting will be held this Tuesday, and then adjourned to the end of the month so updated proxy solicitation materials can be distributed to Sothebys’ shareholders. The annual meeting is expected to be convened sometime before June 1.
Sothebys’ controversial poison pill plan
Sothebys (NYSE:BID) had put in place a relatively draconian “poison pill” shareholder rights plan in place, a one-year plan which barred any third party from owning more than 10% of the company.
Third Point has challenged the legality of Sothebys (NYSE:BID) poison pill plan in federal court in Delaware, but agreed to withdraw the lawsuit as part of the deal announced today.
Slamming each other’s BoD nominees
Until the deal announced today, the two sides had spent the last couple of months sniping at each other and tearing down the reputations of the respective BoD nominees. Both Sothebys (NYSE:BID) and Third Point released dueling “shareholder letters” in the last few weeks slamming the qualifications and experience of the various BoD nominees up for election on both sides.
Sothebys (NYSE:BID) shares are up 87 cents at $44.26 in active trading in New York today as of 12:07 PM EDT.