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Activist Loeb seeks board shakeup at Sotheby’s

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Activist investor Dan Loeb Thursday nominated himself and two allies to the board of Sotheby's, arguing the auction house's current board lacks the skills and inclination to undertake needed changes.

Loeb, chief executive of hedge fund Third Point, Sotheby's biggest shareholder with 9.5 percent of the shares, praised some of Sotheby's recent shareholder-friendly actions, but said the board must go further in cutting costs and repositioning Sotheby's.

"All shareholders will benefit from having an owner's perspective in the boardroom," Loeb said in a securities filing.

"The entrenched directors lack the fresh perspective necessary to overhaul the Company's challenged operation structure and cure its cultural malaise."

Sotheby's hit back, saying it was "disappointed" at Loeb's proxy campaign which followed a far tougher Loeb letter criticizing Sotheby's leadership in October 2013.

The company disclosed that it offered to appoint Loeb to its board and held "extensive" discussions with Third Point in recent months.

"Sotheby's believes that its Board is best-positioned to support the Company's continued growth and success," the company said. Current directors "are active and engaged, with a diversity of professional backgrounds."

Sotheby's nominating and corporate governance committees will consider the three Third Point nominees in "due course" ahead of its 2014 annual meeting, which has yet to be scheduled, Sotheby's said.

Loeb in October released a blistering letter calling for the ouster of chief executive William Ruprecht due to wasteful spending and poor leadership. Loeb's latest missive, which did not mention Ruprecht, praised Sotheby's for making "some improvements" since October.

In January, Sotheby's announced $450 million in shareholder payouts and a reorganziation in which units will be held to strict benchmarks.

Ruprecht retains "full confidence of the board," said Sotheby's lead independent director Domenico De Sole.

Activist investor Dan Loeb Thursday nominated himself and two allies to the board of Sotheby’s, arguing the auction house’s current board lacks the skills and inclination to undertake needed changes.

Loeb, chief executive of hedge fund Third Point, Sotheby’s biggest shareholder with 9.5 percent of the shares, praised some of Sotheby’s recent shareholder-friendly actions, but said the board must go further in cutting costs and repositioning Sotheby’s.

“All shareholders will benefit from having an owner’s perspective in the boardroom,” Loeb said in a securities filing.

“The entrenched directors lack the fresh perspective necessary to overhaul the Company’s challenged operation structure and cure its cultural malaise.”

Sotheby’s hit back, saying it was “disappointed” at Loeb’s proxy campaign which followed a far tougher Loeb letter criticizing Sotheby’s leadership in October 2013.

The company disclosed that it offered to appoint Loeb to its board and held “extensive” discussions with Third Point in recent months.

“Sotheby’s believes that its Board is best-positioned to support the Company’s continued growth and success,” the company said. Current directors “are active and engaged, with a diversity of professional backgrounds.”

Sotheby’s nominating and corporate governance committees will consider the three Third Point nominees in “due course” ahead of its 2014 annual meeting, which has yet to be scheduled, Sotheby’s said.

Loeb in October released a blistering letter calling for the ouster of chief executive William Ruprecht due to wasteful spending and poor leadership. Loeb’s latest missive, which did not mention Ruprecht, praised Sotheby’s for making “some improvements” since October.

In January, Sotheby’s announced $450 million in shareholder payouts and a reorganziation in which units will be held to strict benchmarks.

Ruprecht retains “full confidence of the board,” said Sotheby’s lead independent director Domenico De Sole.

AFP
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