Sotheby's Four-Slide Takedown Of Dan Loeb
AP Photo
Since taking a 9.2% stake in Sotheby's last August, Dan Loeb has agitated for changes to the company's business that would "return capital to shareholders" optimize "the Company’s balance sheet."
To do that, Loeb argued that he and two others supported by his hedge fund, Third Point should be appointed to the board.
On Tuesday, Sotheby's released an investor presentation saying, in short, 'no way.' The company sees Loeb as a smash and grab investor who joins boards, enriches himself and his investors, and then moves on to his next company.
Sotheby's not only defends its own performance — which Loeb attacked, saying that its "competitive position" was deteriorating — but it also lambastes Loeb's board nominees with most of the focus on Loeb himself.
To get a sense of how brutal it is, you really only need to see four slides.
Where Loeb has said that his nominees have experience in "Sotheby’s key business building block: luxury customer relationship development," the company disagrees. In fact, it argues that one of the nominees, Harry Wilson, has no experience whatsoever in any part of the auction house's business.
Then there's the attack on Loeb himself. In two slides the presentation goes over Loeb's history on company boards. On this next slide, check out what the company says about his two year tenures on Ligand and Biofuel Energy Corp.
Basically, the two companies didn't do so hot while Loeb was around.
And then there's Yahoo, and the deal under which Loeb left the board (the company repurchased $1.16 billion of his shares.
Sotheby's
When the Yahoo deal went down, there was a lot of talk about Loeb's payout. Some said that it smacked of greenmail — a deal a company makes to get a particularly thorny investor off its board. The New York Times also pointed out that Loeb got in and out of Yahoo as the company was riding the wave of Alibaba's success.
Then when the going got tough at Yahoo, Loeb left. At least that's how the NYT told it in the story excerpted in the slide below.
Obviously, none of this is very flattering. Most investors do not want to be accused of going after quick $600 million hits — boards especially do not want to welcome those kinds of investors to their companies.
So we'll see if Loeb and his nominees make it onto Sotheby's board after this.
For the full Sotheby's presentation, click here.
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