UPDATE: Sotheby's Responds, Believes Board is Best Positioned for Growth
Sotheby's (NYSE: BID) today issued the following statement regarding notice from Third Point LLC submitting nomination for three candidates to stand for election to Sotheby's Board of Directors at the Company's 2014 Annual Meeting:
Sotheby's has engaged in extensive discussions with Third Point over the past months in an effort to reach a resolution that would avoid a proxy battle. As part of these discussions, Sotheby's offered to appoint Daniel S. Loeb to the Sotheby's Board of Directors, where he would also serve on three committees – the Nominating and Governance Committee, the Audit Committee and the Finance Committee – and proposed customary standstill arrangements.
Sotheby's is disappointed that Third Point has chosen this path. Sotheby's had a solid 2013 and 2014 is off to a strong start, with record auction results in many categories, a $300 million special dividend payable to shareholders next month, and a commitment for disciplined investment and ongoing capital return.
Third Point's actions are particularly unfortunate given the efforts that Sotheby's has made to reach an agreement with Mr. Loeb. These efforts have included:
* Sotheby's offer to appoint Mr. Loeb to the Board of Directors, with roles on three key Board committees; * Sotheby's proactively shared non-public information with Third Point (under a standard confidentiality agreement) and considered its views in developing the Company's recently announced Capital Allocation and Financial Policy Plan and other initiatives; * Feedback from Mr. Loeb, who, in conversations with management, characterized the Company's Capital Allocation and Financial Policy Plan as the "right approach," striking a balance between returning capital to shareholders and continuing to invest in the business; * Six meetings with Third Point since August 2013, three of which included the lead independent director of Sotheby's; and * Numerous conference calls with Third Point and members of the Company's Board of Directors and management team.
Sotheby's Board of Directors and management team are committed to delivering value for all Sotheby's shareholders. The Company believes the new Capital Allocation and Financial Policy Plan, together with actions Sotheby's has taken to increase competitiveness and bring complementary expertise to the Board and the leadership team, best position Sotheby's to build value for its clients and shareholders now and in the future.
Domenico De Sole, Sotheby's Lead Independent Director, stated, "Sotheby's is strongly positioned today, with a strategy and executive leadership team led by Bill Ruprecht that has the full confidence of the Board. This team and this strategy are delivering exceptional results for Sotheby's clients and value to Sotheby's shareholders. The strength of the Company is reflected in Sotheby's stock price, which remains near historic highs and has exceeded the S&P Midcap index over the one, five and ten year periods."
Sotheby's believes that its Board is best positioned to support the Company's continued growth and success. The Board is composed of 12 highly qualified directors, 10 of whom are independent, and three of whom joined the Board in the past three years. The directors are active and engaged, with a diversity of professional backgrounds including experience leading and profitably growing other public and private companies with global luxury brands. Directors also have experience in relevant disciplines, including marketing, finance, banking, real estate, client services and law, and have demonstrated success leading corporate change and value creation through financings, capital allocation strategies, and business development.
The Board's Nominating and Corporate Governance Committee will consider the Third Point nominations in due course. The Board will present its recommended slate of director nominees in Sotheby's definitive proxy statement and other materials, including the Company's WHITE proxy card, to be filed with the Securities and Exchange Commission and mailed to all shareholders eligible to vote at the 2014 Annual Meeting, which has yet to be scheduled. Sotheby's shareholders are not required to take any action at this time.
Goldman, Sachs & Co. is serving as financial advisor to Sotheby's, and Wachtell, Lipton, Rosen & Katz is legal advisor.
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