Daniel Loeb gain a slight bit of potential leverage in his fight over Sotheby’s board. The Delaware Chancery court will fast-track his suit to negate Sotheby’s poison pill:
Vice Chancellor Donald Parsons seemed sympathetic to the argument that the pill — which caps Mr. Loeb’s investment at just under 10% while other, passive, shareholders can own twice that — is unfair.
“Here we have an uncommon rights plan that on its face discriminates between activist and passive investors,” Mr. Parsons said in the telephonic hearing. “It is sufficiently possible that the board is attempting to tilt the playing field for proxy contest in its favor and make for an unfair fight.”
But Mr. Parsons said Mr. Loeb, whose hedge fund Third Point LLC owns 9.6% of Sotheby’s, faces “an uphill battle” to show the pill actually puts him at a disadvantage. Third Point owns about 10 times as much stock as Sotheby’s directors and executives he is fighting, Mr. Parsons noted.
Loeb’s Campaign Against Sotheby’s Gets Boost From Delaware Judge (MoneyBeat/ WSJ)
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