Sotheby’s shareholder Marcato Capital Management LLC wants the auction house to sell its New York and London properties and use short-term debt to fund some operations to free up $1.3 billion in cash, the Wall Street Journal reported.
Richard McGuire, Marcato’s founder, unveiled the plan for boosting Sotheby’s ability to return cash to shareholders at a conference in San Francisco, the Journal said. He told investors the stock could rise to $68 if the measures are adopted, the newspaper said. Sotheby’s shares closed at $52.58 yesterday in New York.
Sotheby’s adopted a shareholder-rights plan on Oct. 4 to protect itself from hostile takeovers after hedge-fund manager Daniel Loeb increased his stake in the New York-based auctioneer and called on Chief Executive Officer William Ruprecht to resign. In September, Sotheby’s said it’s reviewing capital allocation and financial policies and that Patrick McClymont, an investment banker at Goldman Sachs Group Inc., would replace Chief Financial Officer William Sheridan.
Sotheby’s stock has risen 56 percent this year, valuing the company at $3.6 billion. Marcato has a 6.7 percent stake, while Loeb’s Third Point LLC owns 9.3 percent, according to data collected by Bloomberg.