The protagonists in the battle over the future of Sotheby’s have called a truce, with both sides conceding points.
Hedge Fund billionaire Daniel Loeb is to get
a seat on the board along with two of his nominees, and Sotheby's
have agreed to remove the 'poison pill' shareholder rights
manoeuvre issued to hamper attempts by Loeb's company Third Point
to acquire more stock in the company, although Third Point have
reportedly agreed for this to be capped at 15%.
However, the Loeb nominees will not replace
existing directors and the board will expand to 15 members.
The deal also sees chairman and chief
executive Bill Ruprecht, who had faced repeated attempts by Loeb to
oust him, remain in office.
The deal came a day before the annual
shareholder meeting (now opened and then postponed), which was due
to elect/re-elect directors - and after weeks of vigorous lobbying
over proxy votes in a hard-hitting campaign by both sides to secure
support from key investors over the elections.
It is thought that deal came about for a
number of reasons. On the one hand it appeared unlikely that Third
Point would succeed in their legal challenge to the 'poison pill'
in time for the shareholders' meeting, while on the other a clear
win for Sotheby's existing board via the proxy vote was in no way
There were also reports of dissatisfaction
among existing directors.
The effect on the share price and the
potential long-term damage to reputations risked by such a
protracted and public spat would doubtless have also concentrated
minds, especially as it has all been such a distraction from the
business of auctioneering and private treaty sales.
It's a point set in stark relief by the
start of the flagship fortnight of Impressionist, Modern and
Contemporary art sales in New York.
Mr Loeb's two nominees for the board are
former investment banker Olivier Reza, who is also a jewellery
designer, having revived the business started by his father
Alexandre, and Harry Wilson, a noted restructuring expert.
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