According to a recently amended 13D filing with the Securities and Exchange Commission, Third Point, a fund led by Dan Loeb, announced that it reached an aggreement with Sothebys (NYSE:BID) concerning the expansion of the latter’s Board of Directors to combine the company’s and Third Point director slates. Pursuant to the agreement, Daniel S. Loeb, Olivier Reza, and Harry J. Wilson have been appointed to the Board and will be included in the company’s slate of director nominees for election at the Annual Meeting of Shareholders expected to be held on the 6th of May, 2014. Noteworthy, Third Point’s in Sotheby’s will be capped at 15.00% under the agreement.
Earlier in April, Dan Loeb claimed that the board has too little “skin in the game,” since it collectively owns less than 1 percent of the company, and that its members are “overly focused on short-term metrics.” Third Point currently owns a position of 6.65 million shares, 9.64% of Sothebys (NYSE:BID)’s total common stock outstanding. The fund’s Lead Independent Director, Domenico De Sole expressed bullish views on the company’s prospects stating that “Sotheby’s is strongly positioned today, with an executive leadership team committed to delivering excellent results for Sotheby’s clients and shareholders.”
Founded in London on March 11, 1744, Sothebys (NYSE:BID) is a global auctioneer of authenticated fine art, decorative art, and jewelry. The company functions as an agent in the sale of works of art at auction, purchases and resells works of art, and performs art-related financing activities. In 2004, Sothebys set the world record for any work of art at action, selling Pablo Picasso’s Garçon à la pipe for $104.20 million in New-York.
In 2013, the global auctioneer announced profits of nearly $130.00 million, compared $108.00 million in the previous year. The company’s stock trades at a trailing price to earnings ratio of around 23.50, more than double the number for the industry in which it operates. The company expected to generate EPS of $2.29 per share, the mean analysts’ recommendation for Sothebys shares is ‘Overweight.’
Richard Mcguire‘s Marcato Capital Management is another significant shareholder of Sothebys (NYSE:BID). The fund holds 4.56 million shares of the company.
A very outspoken investor and a pioneer in activist investing, Dan Loeb manages a $5.80 billion worth equity portfolio, of which around 45.00% is invested in the Services and Technology Sectors. The largest share in the portfolio is accounted by a position of 7.50 million shares in American International Group Inc (NYSE:AIG), a global insurance company.