Sotheby’s have announced that they are reviewing their financial strategy in a bid to create the optimum balance between future investment in the company and shareholder return.
The announcement of the review comes less
than two weeks after Wall Street hedge fund billionaire Daniel
Loeb's firm Third Point announced
it had acquired a 5.7% stake in the firm and indicated that he
would be putting pressure on Sotheby's board to create better
Sotheby's chief executive Bill Ruprecht, who
said the board would present the results to investors early next
year, highlighted recent achievements in this sphere, such as
raising buyer's premium thresholds, which had yielded an additional
$20m in the second quarter of 2013, and a saving of $5m as a result
of restructuring long-term debt.
He also stressed the importance of strong
liquidity in the battle to stay competitive, particularly with
respect to offering loans and auction guarantees, adding that the
performance of the share price over the past decade illustrated the
prudence of the company's governance over the period.
Mr Loeb, who said he would be entering into
talks with Sotheby's board about the future of the company, is
thought to have been joined by fellow investors Nelson Petz and
Marcato Capital Management in pressing the company for more of a
return for shareholders.
Sotheby's recent statement accompanying
their first-half results announced that they would be prepared to
consider selling both their New York and London headquarters.
The Wall Street Journal reported
that they had actually put their NY HQ on the market, although
there was no official announcement from Sotheby's to that effect as
ATG went to press.
"Any transaction has to deliver substantial post-mortgage value,
while any sale must afford Sotheby's funds for attractive
purpose-built new space, which meets the company's unique facility
requirements," they stated.