Sotheby's adopts "poison pill" after Loeb raises stake
(Reuters) - Sotheby's adopted a "poison pill" to ward off an unwanted takeover, two days after activist investor Daniel Loeb's Third Point LLC said it had raised its stake in the auctioneer and called for its chief executive to step down.
The shareholder rights plan — better known as a poison pill — will be triggered if any one investor, with exceptions, buys more than 10 percent of Sotheby's common shares.
"Poison pills" are designed to dilute holdings of an investor should its stake exceed a given threshold.
"It is intended to protect Sotheby's and its shareholders from efforts to obtain control that are inconsistent with the best interests of the company and its shareholders," the company said in a statement.
No shareholder owns more than 10 percent of Sotheby's. Third Point, its largest shareholder with a 9.3 percent stake, was not immediately available for comment.
Loeb said on Wednesday that he was seeking to replace Sotheby's Chief Executive William Ruprecht, once he gains a board seat.
The activist investor likened the 269-year-old auction house to "an old master painting in desperate need of restoration." He said he wants auctions and private as well as internet sales reinvigorated, the company's global footprint to expand and to "exploit the Sotheby's brand through adjacent businesses."
Sotheby's shares were down 0.2 percent at $50.85 on the New York Stock Exchange in early morning trading on Friday.
The announcement comes two weeks after supermarket operator Safeway Inc adopted a similar move after hedge fund Jana Partners LLC amassed a large stake in the company.
(Reporting By Siddharth Cavale and Maria Ajit Thomas in Bangalore; Editing by Saumyadeb Chakrabarty and Joyjeet Das)
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