Sotheby’s responds to Marcato Capital Management letter

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Sotheby's February Sales

It’s been a tough week for Sotheby’s, which is under fresh attack from an activist investor. The news comes not long after the attack from major shareholder Daniel Loeb, which ended with Loeb being given a board seat.

Now San Francisco-based activist fund Marcato, which has a 9.5 % Sotheby’s stake, has written to Sotheby’s demanding an immediate $500 million return of capital to shareholders.

In response to the letter, the Board of Sotheby’s reiterated its determination to defer capital allocation decisions until a new CEO has been selected.

“The Board welcomes shareholder views and suggestions,” said Sotheby’s lead independent director Domenico De Sole, “but our immediate priority is selecting a new CEO and determining a strategy to increase shareholder value. We will address capital allocation based on our strategy and the resulting capital needs. Further, good governance requires that the new CEO be involved in something as important as our capital allocation policy.”

The Board noted last week that the search for a new CEO “is moving forward in a disciplined and thoughtful manner.”