Sotheby's Offers Response to Loeb's Third Point: Says Poison Pill is 'Important Tool' to Ensure Holders Treated Fairly
Sotheby's (NYSE: BID) issued the following in response to reports that Third Point has filed litigation against the Company.
Late last year, Sotheby's adopted a one-year shareholder rights plan, which expires in October 2014 and cannot be extended beyond October 2014 without shareholder approval. It is similar to those adopted by numerous publicly traded companies facing similar situations. Sotheby's shareholder rights plan was adopted in response to rapid accumulations of significant portions of the Company's outstanding common stock, including through derivatives.
The Board believes this plan is an important tool to ensure that all Sotheby's shareholders are treated fairly, including in the context of rapid accumulations by 13D filers. The plan is designed to limit the ability of any person or group to seize control of the Company without appropriately compensating all Sotheby's shareholders. It provides the Board and shareholders with time to make informed judgments. It does not affect trading by passive investors inasmuch as it allows such investors to accumulate as much as 20% of Sotheby's common stock and has no impact on a takeover proposal for the entire company acceptable by the holders of a majority of Sotheby's shares.
The Company intends to review Third Point's complaint regarding the rights plan once it has been served with it, and continues to believe that the Board's decisions to adopt and maintain the 12-month rights plan are both valid and legal.
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