Sotheby’s announced that investor Daniel S. Loeb has been nominated as a candidate to the auction house’s board of directors at the company’s next shareholders’ meeting.
Loeb, founder and CEO of New York-based hedge fund Third Point LLC is also a 30% shareholder in Hellenic Bank since last November when a group of investors pumped 100 mln euros in the Cypriot bank, helping it avoid a state bailout following the collapse of the island’s banking sector. Online gaming developer Wargaming.net also took a 30% stake, while local fund Demetra grabbed a 15%, with the Church of Cyprus diluting its control from 25% to just 7% after the restructure.
Third Point has pushed for a total of three nominations which the company and shareholders are expected to resist. The board is composed of 12 highly qualified directors, ten of whom are independent, and three joined in the past three years.
Sotheby’s said in an announcement last week that it has engaged in extensive discussions with Third Point over the past months in an effort to reach a resolution that would avoid a proxy battle. As part of these discussions, it offered to appoint Daniel Loeb to the board, where he would also serve on three committees.
The fund, with $14 bln under management, last year raised its stake in the auction house and called for the resignation of the auctioneer's chief executive and chairman on concerns about the company's leadership and strategic direction.
Loeb’s fund, now Sotheby's largest shareholder with a 9.3% stake, said it would seek to replace CEO William Ruprecht once Loeb gains a seat on the company's board.
However, that seems highly unlikely as the present board seems to be giving the current management its full backing.
Domenico De Sole, Sotheby’s Lead Independent Director, said in a statement, “Sotheby’s is strongly positioned today, with a strategy and executive leadership team led by Bill Ruprecht that has the full confidence of the board. This team and this strategy are delivering exceptional results for Sotheby’s clients and value to shareholders. The strength of the company is reflected in Sotheby’s stock price, which remains near historic highs and has exceeded the S&P Midcap index over the one, five and ten year periods.”
The company said the board’s Nominating and Corporate Governance Committee will consider the Third Point nominations in due course and the board will present its recommended slate of director nominees in the proxy statement and other materials to be sent to all shareholders eligible to vote at the 2014 annual meeting, which has yet to be scheduled.
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