Dan Loeb’s Third Point LLC took its fight to add directors to the Sotheby’s board to court, seeking to overturn a poison pill that would be triggered when an activist investor obtains 10 percent of the auction house’s stock.
Third Point filed a lawsuit Tuesday in Delaware Chancery Court against Sotheby’s and its board. The hedge fund said the poison pill, normally used as a takeover defense, is being employed to impede a proxy contest and maintain the status quo.
“The terms of the poison pill demonstrate that the board has no genuine concern with a takeover attempt, but are instead intended to thwart Third Point, Sotheby’s largest shareholder, from effectively running a slate of director candidates,” according the complaint provided by Third Point.
Sotheby’s, under pressure by Loeb to increase shareholder value, this month rejected a proposal by the hedge-fund manager to add three directors to its board, saying the nominees don’t add relevant skills.
The case is Third Point LLC v. Ruprecht, CA9469. Delaware Chancery Court (Wilmington).