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  • Auction

Sotheby's vs Loeb

May 27, 2014
Asja Nastasijevic is an Art Historian with the major in Modern Art. She's involved in art writing and criticism for several years now. Art is her passion and writing about it is both work and pleasure. Among modern art movements she loves Fauvism, Abstract Expressionism, and POP ART and her favorite artists are Henri Matisse, Mark Rothko and Andy Warhol. She fell in love with Street Art when she first saw ROA’s Sleepy Pigs in Brussels few years ago. Since then, she devotedly explores this form of artistic expression. She hates when someone asks her whether the street art is a real art. What makes any art a real art? Art is an evolutionary act with constant changes in its performance. In Asja’s opinion, the real art is what you want to hang on the walls of your living room, as simple as that. So she wants to hang the works of Ron English, Gaia and ROA above her TV cabinet or to place the artworks of Mark Jenkins and Isaac Cordal next to her sofa. She enjoys bowling and doodling.

In early May, the hedge fund manager Dan Loeb secured himself and his two allies three board seats at Sotheby’s and thus ending months-long battle between him and the auction house. Over the last several months, Mr. Loeb has criticized the company’s board expenses and management costs, questioning commitment of CEO Bill Ruprecht and Sotheby’s overall performance. Both sides have exchanged heavy blows in what looked like a political campaign.

Auction house
Sotheby’s

Activist Investor

So-called activist investors, professional money managers who seek to shake up companies in a bid to raise their stock prices, became considerably powerful in recent years. Accordingly, companies are increasingly choosing to reach a deal and settle rather than fight with them. Known as a tough activist investor, billionaire Loeb is also a passionate collector of art and has highly prized pieces in his Third Point firm. Being familiar with the fine arts, Loeb apparently targeted Sotheby’s because he sees potential in the area.

Sotheby's
Dan Loeb

Beneficial Truce

Although he was twice offered a board seat, Loeb turned it down stating at the time that one seat was not enough to effect change. Now, additional two seats, assigned to the Third Point nominees, former investment banker and jeweler Olivier Reza and restructuring expert Harry Wilson, give Loeb more power allowing him to increase his stake from under 10% to 15%. Nevertheless, he didn’t manage to get Bill Ruprecht ousted.  It remains to be seen whether Loeb’s participation, after the antagonism with Ruprecht, will result in positive change for the company. The recent truce shows that both sides are willing to compromise. If they can work together, everybody, namely investors in Sotheby’s could soon benefit from this deal.

Auction house
Sotheby’s