The Morning Brief: Dan Loeb Wins a Round in Sotheby’s Proxy Battle
Activist investor Dan Loeb got a big boost Thursday when proxy advisor Institutional Shareholder Services Inc., endorsed two of his firm’s three director nominees for Sotheby’s, including Loeb himself. ISS issued a report that criticized the auctioneer’s board for being “misleading” to shareholders about its performance and said some change to the company’s board is warranted, according to the Wall Street Journal.“It is difficult to believe this is a board keenly attentive to all the opportunities at hand to enhance shareholder value,” ISS reportedly wrote. Loeb’s Third Point, which owns 9.6 percent of the stock, launched a proxy fight after Mick McGuire’s Marcato Capital Management took an activist position. “Under the stewardship of Sotheby’s Board of Directors and management team, Sotheby’s has consistently delivered strong, long-term performance and superior value creation,” Sotheby’s said in a statement in response to the ISS report. Sotheby’s previously offered Loeb a seat on the board but he did not want to join it by himself. Shareholders will vote on the proxy slate at the annual meeting, scheduled for May 6 in New York.
— In another proxy fight, Thomas Sandell’s Sandell Asset Management, which owns 6.8 percent of Bob Evans Farms, announced its slate of eight candidates for the restaurant company’s board of directors. “Bob Evans has dramatically under-performed its own selected peer group over a 1-year, 3-year, 5-year, and 10-year time period, as well as other peers,” the investor states in a regulatory filing. “To fix this woeful track record of underperformance, Bob Evans needs a fresh, independent, highly-qualified Board of Directors that is able to provide effective management oversight and bring new perspectives and ideas to the company.” Sandell estimates in the filing that the company has an intrinsic value “approaching $90 per share.” The stock closed Thursday at $47.29, up 5.42 percent.
— Starboard Value, which owns 15.1 percent of Wausau Paper, will serve as an observer of the board of directors of the paper company until the earlier of the 2014 annual meeting or September 30, 2014, said Gavin T. Molinelli, managing director of the activist hedge fund in a new SEC filing. Starboard also said it is discussing some sort of arrangement for the board’s composition in an attempt to head off a proxy fight. “The discussions are ongoing and Starboard is hopeful that a mutually agreeable resolution will be reached in the upcoming weeks,” it states in the filing. On April 2, Henry Newell resigned as chief executive officer of Wausau, effective immediately. The filing also said that Newell plans to resign from the board, while non-executive chairman Thomas J. Howatt will be retiring from the board in advance of the company’s 2014 annual meeting.
— Tom Steyer, the retired founder of Farallon Capital Management, attracted just one donor to his NextGen Climate Action Committee in the first three months of the year. Mitchell Berger, a Florida lawyer and Democratic fundraiser, gave $10,000 to the climate oriented Super-PAC, according to Bloomberg. Berger’s wife and Steyer’s wife were high school and college classmates, according to the report. Steyer has put $9.3 million into the committee. Bloomberg adds that another $50 in contributions were made in the first quarter, but they were too small to be itemized.
— Bill Daley, a former Illinois Democratic gubernatorial candidate and White House chief of staff, has joined Swiss hedge fund Argentiere Capital, according to the Chicago Tribune. He told the paper he wanted to work at a startup and “hit it off” with Argentiere founder Deepak Gulati, the former head of global equity proprietary trading at JPMorgan Chase, Daley’s former employer. “Everything I’ve done has been at big firms, big law firms, government,” Daley told the paper. “This is my first startup. I wanted the chance to be a part of something that will grow.” Argentiere was launched last June.