Art World
Daniel Loeb Sues Sotheby’s Over Poison Pill Provision
Benjamin Sutton
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Daniel Loeb has sued Sotheby’s over a so-called poison pill provision that prevents his company, Third Point LLC, from acquiring additional Sotheby’s shares, according to the Wall Street Journal. Third Point currently is a 9.6 percent shareholder.
The suit, filed in a Delaware court, alleges that “the poison pill is not a reasonable corporate response to a takeover threat, but rather an improper attempt to thwart Third Point’s proxy contest and ensure that the current board members remain firmly entrenched.”
If Loeb were to acquire more than 10 percent of stock, the auction house would flood the market with cheap shares, essentially diluting the company’s value. This is not the first time the auction house has clashed with Loeb: Earlier this month, Sotheby’s rejected nominations to its board put forth by Third Point (see artnet News’s earlier report).
Sotheby’s, for its part, is defending what they are calling a “one-year shareholder rights plan” that is “similar to those adopted by numerous publicly traded companies facing similar situations,” as reported by Art Market Monitor.
According to the auction house, “the plan is designed to limit the ability of any person or group to seize control of the Company without appropriately compensating all Sotheby’s shareholders.”
Sarah Cascone
