Sotheby’s annual shareholder meeting will go ahead on Tuesday after this ruling. The New York Times summarizes:
But in his ruling, Vice Chancellor Parsons wrote that Mr. Loeb’s primary argument — that the poison pill unfairly impedes his ability to wage his campaign — was flawed. Sotheby’s had presented evidence that the rationale behind its defense could be seen as both rational and proportional to the threat of an activist investor.And even with his current 10 percent stake, Mr. Loeb has been able to fight the company to a draw. Vice Chancellor Parsons noted that the hedge fund manager had roughly 10 times the number of shares that Sotheby’s board now owns, and that his own expert witness testified that, even now, Third Point has a roughly 50-50 chance of winning the proxy contest.Mr. Loeb even testified in a deposition that nothing has hurt his ability to reach out to other shareholders.“There is a substantial possibility,” the vice chancellor wrote, “that Third Point will win the proxy contest, which would make any preliminary intervention by this court unnecessary.”
Delaware Court Upholds Sothebys Poison Pill (New York Times)
