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Hedge fund manager Loeb says Sotheby's attacks on him are 'false'

April 14, 2014 at 06:55 pm EDT

MarketScreener.com By The editorial team

Hedge fund manager Loeb says Sotheby's attacks on him are 'false'

BOSTON (Reuters) - Activist investor Daniel Loeb, who is fighting to win control of three board seats at Sotheby's, on Monday raised the temperature by saying the current board has failed and that its attacks on him are "false" and "misleading."

In a filing with the Securities and Exchange Commission, Loeb responded to Sotheby's presentation of last week when the 270-year-old auction house questioned Loeb's ability to add value to its business.

Loeb in his filing also took aim at the Sotheby's board for its claims on the company's performance.

"Management's claim that 2013 was a 'record' year is misleading and demonstrates the risk of having a Board asleep at the switch," Loeb wrote. He noted that earnings per share fell by 42 percent between 2007 and 2013, and that revenues fell and expenses climbed over the same time period.

Sotheby's declined to comment.

Loeb's $14.5 billion hedge fund Third Point currently owns a 9.6 percent stake in Sotheby's and started a proxy contest earlier this year, putting Loeb and two other people forward as directors. Since the middle of last year, Loeb and Third Point have been pushing the company to overhaul its financial strategy, return capital to investors and improve its position in the modern art market.

To some observers, the battle is being drawn along the same lines as the 2012 battle for Yahoo, in which Loeb played an instrumental role in pushing out Scott Thompson as chief executive and hand-picking Marissa Meyer to run the company. The two sides negotiated a settlement and Loeb joined Yahoo's board.

Sotheby's share price has fallen 21.33 percent since October 2013. The company in October adopted a poison pill to prevent activist investors from owning more than 10 percent, two days after Loeb raised his stake in the company. Third Point has filed suit in Delaware Chancery Court to try and force Sotheby's to withdraw the poison pill. The next hearing is scheduled for April 26.

Loeb said Sotheby's was disingenuous in criticizing his exit from Yahoo last year. Loeb said Yahoo's share price climbed more than 85 percent during the time he and two other directors close to Third Point served on the board.

He also said that Sotheby's made "false statements" about his experience in the art world. He said that as a prominent collector he has loaned some of his personal collection to museums like the Museum of Modern Art in New York.

Sotheby's annual meeting will take place on May 6, and before then Loeb and Sotheby's will both try to persuade investors to their side. Proxy voting advisory firm ISS is expected to make a recommendation on which slate to pick in the coming days.

(Reporting by Svea Herbst-Bayliss; Editing by Leslie Adler)

By Svea Herbst-Bayliss

Stocks mentioned in the article

	Add to a list Add to a list 0 selected To use this feature you must be a member Log in Sign up	Price	Change	5d. change	Capi.
	SOTHEBY'S	- USD	-.--%	+0.07%	2.66B
	SWITCH, INC.	34.25 USD	+0.06%	+0.06%	5.41B

Daniel Loeb

Daniel Seth Loeb (born December 18, 1961) is the founder and chief executive of Third Point LLC, a New York-based hedge fund with $12.9 billion in assets.

Biography
Loeb was raised in a Jewish family in the Los Angeles area, one of three children of Ronald and Clare Spark Loeb. His father was a partner at the Los Angeles law firm of Irell & Manella LLP and general counsel for Williams-Sonoma. His mother is a historian. Loeb’s great-aunt, Ruth Handler, created the Barbie doll and co-founded Mattel Inc.

According to Bloomberg Markets Magazine, Loeb grew up in Santa Monica Canyon in California, and attended Palisades Charter High School, commonly known as 'Pali High' in the Pacific Palisades neighborhood of Los Angeles. Later, he attended University of California at Berkeley for two years before subsequently graduating from Columbia University with a degree in Economics.

Prior to founding Third Point in 1995, Loeb worked at Citicorp and Warburg Pincus.

He is also a founding Master Player of the Portfolios with Purpose virtual stock trading contest.

Opinions

Loeb is well known in the financial world for writing public letters, in which he expresses disapproval of the performance and conduct of other financial executives. Supporters contend his letter writing is effective shareholder activism; critics counter that his letters are distracting for executives and uncomfortable for investors. Less than 10% of Third Point's total assets under management goes to shareholder activism.

Loeb has argued that the United States government is undergoing a 'crisis of leadership'; in his opinion, the administration of President Barack Obama is committed to 'redistribution rather than growth'.

In 2013, Loeb was a signatory to an amicus curiae brief submitted to the Supreme Court in support of same-sex marriage during the Hollingsworth v. Perry case.

Source @ Wikipedia

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Linked companies
Third Point LLC Third Point LLC Investment ManagersFinance Third Point LLC is a SEC-registered investment adviser and hedge fund manager headquartered in New York City. The firm was founded in 1995 by Daniel S. Loeb and is a subsidiary of Third Point LP. Third Point provides discretionary investment advisory services to a variety of domestic and offshore private investment vehicles, single private equity-style fund and a separately-managed institutional account.	Chief Executive Officer
Third Point Ventures LLC Third Point Ventures LLC Investment ManagersFinance Third Point Ventures LLC is a venture capital firm, a subsidiary of Third Point LLC founded in 1995 by Daniel Seth Loeb. The firm is headquartered in Menlo Park, California.	Chief Executive Officer

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