In his battle for control of the auction house Sotheby’s, the activist investor Daniel S. Loeb has focused much of his attention on what he calls the inadequacy of its board members.
Late Tuesday, Sotheby’s fired back with its most comprehensive rebuttal yet, and this time, it’s personal. In a 53-page deck filed with the Securities and Exchange Commission, the company gives a glimpse of how the battle turned bitter, highlights its plan to return money to shareholders and defends its so-called poison pill. It also includes a number of slides attacking Mr. Loeb’s record and raises questions about whether he has shareholders’ best interests in mind.
Sotheby’s focuses on Mr. Loeb’s campaign at Yahoo, calling his decision to step down from the board and sell his stake for $1.2 billion motivated by self-interest.
These points are part of the case Sotheby’s will make to Institutional Shareholder Services, the proxy advisory firm that will pick a side and make a recommendation to shareholders in the next few weeks. It will set the tone for the company’s annual meeting, scheduled for May 6, when shareholders will vote for the board or Mr. Loeb.
There’s a long history of back and forth between Sotheby’s and Mr. Loeb’s hedge fund, Third Point, but both sides have dug in their heels in recent weeks. Mr. Loeb, who started a proxy contest in January and is seeking three seats on the board, has sued Sotheby’s over its poison pill, which blocks him from building up much more than his current 9.6 percent stake.
And as things heat up, Mr. Loeb has created his own website, valuesothebys.com, complete with an image of a Damien Hirst sculpture of a medicine cabinet with multicolored pills called The Void.
A quick run through the deck reveals that Sotheby’s has provided shareholders with a report card of Mr. Loeb, who is seeking a seat on the board, and his two other nominees, Harry J. Wilson and Oliver Reza.
And the auction house has weighed in on Mr. Loeb’s experience with previous activist campaigns, arguing that he stays on the board of a company for only two years on average (see pages 37 and 38).
