Sotheby’s Holder Shanda Gets Antitrust Approval on Stake

  • Auction house said May 9 an investor would increase holdings
  • Shanda had a 2% stake valued at $31 million as of March 31

Sotheby’s shareholder Shanda is poised to increase its stake in the struggling auction house.

Tianqiao Chen and Chrissy Qian Qian Luo, co-founders of Singapore-based Shanda, an owner of a 2 percent stake in Sotheby’s, received U.S. antitrust approval allowing them to purchase more shares. The Federal Trade Commission announced the approval in a May 17 notice. The agency didn’t disclose Shanda’s plans. The company’s interest in Sotheby’s was valued at $31 million as of March 31.

Sotheby’s said on May 9 that an investor may increase its stake to as much as 10 percent, fueling speculation that the company could be acquired or taken private. On the company’s earnings call, Chief Financial Officer Michael Goss said the investor could purchase the stock on the open market or through a private transaction. He declined to elaborate. A Sotheby’s spokeswoman confirmed on Wednesday that Shanda is the investor.

Federal law requires investors to notify antitrust officials about the acquisition of company stock. That applies even when buying minority stakes, unless the investor buys less than 10 percent of outstanding shares and has no intent of participating in the company’s business decisions.

Cohen’s Stake

Shanda may be raising its stake as Sotheby’s has lost more than one-third of its value in the past year and key executives departed as Chief Executive Officer Tad Smith has attempted a turnaround. Shanda reported its initial acquisition of 594,544 Sotheby’s shares at the end of December. Shanda Group’s main lines of investments are in private equity, public markets and real estate, according to its website.

Billionaire trader and collector Steve Cohen’s Point72 Asset Management has been also scooping up Sotheby’s shares in recent months. Point72 had a 5.5 percent stake, valued at $86.1 million, at the end of March. That made Point72 the auction house’s fifth-largest shareholder.

Hedge fund manager Daniel Loeb’s Third Point, Sotheby’s largest shareholder, has an 11 percent stake. Since acquiring Sotheby’s shares in 2013, it has pressured the company to improve profitability. During the first quarter, Third Point added 10,925 shares. Its total holdings were worth $178 million as of March 31.

Loeb, a Sotheby’s director, declined to comment Wednesday. Shanda representatives couldn’t be immediately reached.

Sotheby’s rose 1.1 percent to $28.04 at 4:15 p.m. in New York.

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