Sotheby's paying special dividend, plans buyback

Published on NewsOK Modified: January 29, 2014 at 9:40 am •  Published: January 29, 2014

NEW YORK (AP) — Auction house Sotheby's is declaring a special dividend, starting a $150 million stock repurchase program and is separating its agency and financial services divisions. It also plans to evaluate its real estate holdings in New York and London over the next year or two.

It said it wants to examine whether it should sell its headquarters in New York and relocate, or sell part of the York Avenue building and stay in the reconfigured space. Sotheby's said it is currently conducting a bidding process to explore these options.

It's also assessing options for its New Bond St. property in London.

The announcement comes as two hedge funds with sizeable stakes in the auction house have been pressing for changes.

Its stock rose 85 cents, or 1.7 percent, to $49.73 in morning trading Wednesday. Its shares are down more than 6 percent over the past three months.

In September Sotheby's announced it was reviewing its capital allocation and financial policies, saying it continued to look for ways to deliver value to shareholders.

The next month Sotheby's adopted a shareholder rights plan, also known as a "poison pill," two days after activist investor Daniel Loeb called for the resignation of CEO William Ruprecht and disclosed that his hedge fund boosted its stake in the auction house.

A "poison pill" is typically used by a company to help ward off any potential hostile takeover attempts. Loeb's Third Point LLC currently owns about 9.2 percent of Sotheby's shares.

Another hedge fund, Marcato Capital Management LP, is also one of Sotheby's biggest shareholders with a stake of about 6.6 percent.

Marcato Capital said in a statement that it considered Sotheby's announcement "a modest step in the right direction," but felt the auction house could return more capital to shareholders and do it faster than under the proposed plan.

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