Loeb’s Third Point Sues Sotheby’s Over 10% Poison Pill Trigger
Dan Loeb’s Third Point LLC took its fight to add directors to the Sotheby’s (BID) board to court, seeking to overturn a poison pill that would be triggered when an activist investor obtains 10 percent of the auction house’s stock.
Third Point filed a lawsuit today in Delaware Chancery Court against Sotheby’s and its board. The hedge fund said the poison pill, normally used as a takeover defense, is being employed to impede a proxy contest and maintain the status quo.
“The terms of the poison pill demonstrate that the board has no genuine concern with a takeover attempt, but are instead intended to thwart Third Point, Sotheby’s largest shareholder, from effectively running a slate of director candidates,” according the complaint provided by Third Point.
Sotheby’s, under pressure by Loeb to increase shareholder value, this month rejected a proposal by the hedge-fund manager to add three directors to its board, saying the nominees don’t add relevant skills.
The case is Third Point LLC v. Ruprecht, CA9469. Delaware Chancery Court (Wilmington).
To contact the reporter on this story: Phil Milford in Wilmington, Delaware at firstname.lastname@example.org
To contact the editor responsible for this story: Andrew Dunn at email@example.com