Loeb wins war with Sotheby’s to claim three seats on board

US activist investor Dan Loeb chalked up a stunning victory over auction house Sotheby’s yesterday after winning a seat for himself and two allies on the board.

Mr Loeb’s hedge fund Third Point, which has built a 9.6 per cent stake, has been agitating for change and claimed the 270-year old institution – founded in London but now headquartered in New York – was an “old master painting in need of restoration”.

After both sides fired off a series of claims against the other, Sotheby’s gave in to Mr Loeb’s demands ahead of its annual general meeting due for Tuesday. Sotheby’s has agreed to Mr Loeb, Olivier Reza and Harry Wilson joining the board of directors.

Sotheby’s previously gave in and offered Mr Loeb a seat on the board but he refused because he wanted his other nominees to also be accepted.

Under the deal, Sotheby’s will also terminate its shareholder rights plan, or “poison pill”, which prevents activist shareholders from owning 10 percent or more of the company. Third Point has withdrawn its legal challenge to the plan and can now raise its stake to up to 15 percent under the deal.

The trio will take their seats alongside two other directors, expanding the Sotheby’s board to 15. Sotheby’s chairman Bill Ruprecht said: “We will benefit from five fresh voices and viewpoints.” Mr Loeb said he would “work collaboratively with our fellow board members”.

Another activist target, poker and gaming site Bwin.party digital, hit back at the efforts of Jason Ader’s SpringOwl hedge fund to win four seats on the board yesterday. Mr Ader, who owns 5.2 per cent of the company, has attacked a history of “value destruction” since the £1.1bn merger of Bwin and Party Gaming in 2011.

A Bwin.party spokesman said: “We have reviewed the latest materials from SpringOwl and found once again that its comments are focused on selective points of history. SpringOwl has failed to offer any concrete proposals for creating long-term value for shareholders.”

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