The billionaire activist investor Daniel S. Loeb has sued Sotheby’s to remove a poison pill that has prevented his hedge fund from buying more of the company’s shares.
On Tuesday, Mr. Loeb’s hedge fund, Third Point, called the poison pill an “improper attempt by the directors of Sotheby’s to entrench themselves in office and to hinder Third Point’s or any other stockholder’s ability to run an effective proxy contest,†according to a complaint filed in Delaware.
Mr. Loeb, who is known for taking positions in companies and then seeking change on the board, mounted a proxy battle at Sotheby’s last month, requesting three seats on the board. Two weeks ago, the auction house rejected his board nominees â€" which included Mr. Loeb himself â€" saying they added “no relevant expertise not already represented on the board of directors.â€
By suing Sotheby’s, Third Point is hoping that the courts will rule that the poison pill is illegal, allowing Mr. Loeb to buy more shares in the company and make more demands for control of the board. It currently has a 9.6 percent stake in the auction house.
A spokesman for Sotheby’s said the board had not yet received the complaint.
“The company intends to review Third Point’s complaint regarding the rights plan once we have been served with it, and we continue to believe that the board’s decisions to adopt and maintain the 12-month rights plan are both valid and legal,†it said in an emailed statement.
