Third Point: Sothebys’ One Board Seat Offer Won’t Avoid Proxy War

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Third Point LLC said the offer of international auction company, Sothebys (NYSE:BID) for a single seat in the board of directors is not enough to prevent the proxy contest.

In a regulatory filing today, the activist hedge fund stated that it will file a proxy statement with the Securities and Exchange Commission (SEC) regarding its solicitation of proxies during the 2014 annual shareholders meeting of Sothebys (NYSE:BID).

Third Point nominated Dan Loeb and two other executives to the board of directors of the international auction company. In its filing, the activist hedge fund said it shared the conclusion of Sothebys (NYSE:BID) that Loeb is an appropriate member of the company’s board of directors.

Third Point also noted that the international auction company acknowledged the contributions of Loeb in improving its situation over the past six months, and the positive impact of his insights in increasing value for shareholders.

In addition, the activist hedge fund also shared the belief of Sothebys (NYSE:BID) that appointing Loeb as member of the board will be beneficial for the company and its shareholders. Third Point emphasized that aside from Loeb, it is also nominating two other qualified directors expert in areas where the board lacks much-needed depth.

Single voice not enough to bring necessary changes

According to Third Point, based on its experience, “a sole voice representing shareholders’ interests in the boardroom will not be sufficient to bring about necessary change” at Sothebys (NYSE:BID. The activist hedge fund also pointed out, “Its offer of a single seat was not, in our opinion, a serious attempt to forge a settlement that would avoid a proxy contest.”

The activist hedge fund said the Sothebys (NYSE:BID) was well aware about its insistence for numerous board seats, and it was consistent in adhering such request to the company.

“As Sotheby’s acknowledged today, incorporating and listening to new ideas from its owners has increased shareholder value over the past six months. With that conclusion in mind, we look forward to continuing to work constructively with Sotheby’s towards a newly reconstituted board,” said Third Point

Disappointed with Third Point’s nominations

During a conference call with analysts yesterday, Bill Ruprecht, chairman, president, and CEO of Sothebys (NYSE:BID) said the company was disappointed that Third Point has chosen to pass to nominate directors. He emphasized that Sothebys offered to appoint Loeb to the board of directors, key committees, and proactively sharing of non-public information under a standard confidentiality agreement.

Ruprecht added that the company’s team and team and strategy are delivering exceptional value for its shareholders, and Third Points’ nominations will be considered the governance and nominating committee of the board of Sothebys (NYSE:BID) in due course.

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