Sotheby’s blinked first. The auction house’s annual shareholder meeting today should be more pro forma than combative, now that Sotheby’s has agreed to give board seats to Dan Loeb of Third Point and the two nominees on his proxy ballot, Harry Wilson and Olivier Reza. After months of battling, Sotheby’s apparently caved in when it became clear that preliminary votes indicated strong investor support for Loeb’s opposition slate, the New York Times reports. But as a board member, Loeb is likely to have a few things to say about overhauling the company he compared to “an old master painting in desperate need of restoration.” For starters, he has been waging a campaign to get chairman and CEO William Ruprecht to step down.
At the annual meeting, Sotheby’s also plans to nominate two of its candidates to the board — Jessica Bibliowicz and Kevin C. Conroy — as part of the total slate of 15. As part of the deal, Third Point has agreed to customary standstill and voting commitments and terminated its proxy contest, Sotheby’s states in its announcement. In addition, Sotheby’s said it will terminate its one-year shareholder rights plan, effective May 6, the day of the annual meeting. Third Point also agreed to cap its ownership in Sotheby’s at 15 percent. The pressure for change was actually initiated by Mick McGuire’s Marcato Capital Management.
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Many of the hedge fund industry’s biggest luminaries assembled Monday at Lincoln Center’s Avery Fisher Hall for the 19th annual Sohn Investment Conference, which this year was also sponsored by Bloomberg. Attendees heard previously disclosed ideas as well as fresh ones from frequent public speakers like Pershing Square Capital Management’s William Ackman, who made his case for privatizing Fannie Mae and Freddie Mac, and Greenlight Capital’s David Einhorn, who disclosed that Athenahealth is one of those momentum stocks he is famously shorting. However, several people who rarely speak in public also highlighted the afternoon, including Tudor Investment’s Paul Tudor Jones II, who explained why macro managers and trend followers are struggling and what needs to happen to get rolling again. There were also conflicting views given on the state of the housing market and a bearish take on the future price of oil, courtesy of PointState’s Zach Schreiber, who also rarely emerges from the hedge fund shadows. The Wall Street Journal provided a good play-by-play of the afternoon’s events.
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French stock market regulator AMF fined Paul Singer’s Elliott Management and its U.K. arm Elliott Advisors €8 million ($11 million) each, stemming from insider trading charges related to the trading in the stock of French motorways operator APRR, according to Reuters.The AMF claims Elliott’s U.K. operation used confidential information to trade APRR while negotiating to sell its stake to Eiffarie, a joint venture between the French construction company Eiffage and Macquarie Atlas Roads which now owns all of APRR, according to the report. An Elliott spokesman told Reuters the New York hedge fund plans to appeal. “The decision represents a misapplication of French law and is not supported by the evidence,” the spokesman reportedly stated, adding that none of the costs associated with the matter, including any potential penalties, would be borne by the Elliott funds. “Elliott’s trading in APRR did not at any time make use of any material non-public information and was for a legitimate business purpose. Elliott purchased APRR stock on over 300 trading days between December 2005 and June 2010 as part of a longstanding trading strategy.”
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Barry Rosenstein’s Jana Partners nearly doubled its stake in supermarket chain Supervalu Inc. to more than 30.2 million shares, or 11.6 percent of the total outstanding. However, the filing was made in an amended 13G, which means it is not an activist position…yet.
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Soros Fund Management disclosed it owns a 5.11 percent passive position in Spansion Inc., a semiconductor maker. The stock, which fell more than 2 percent in Monday’s regular session, surged 4.64 percent in after-hours trading.
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The Credit Suisse Liquid Alternative Beta Index rose 0.11 percent in April, bringing its gain for the year-to-date to 0.98 percent. The Long/Short Equity strategy was the top performer last month, gaining 0.68 percent. It is up 0.99 percent so far this year. The Event Driven Liquid Index, which fell 0.23 percent in April, is nonetheless the best performer so far this year, up 2.63 percent for the first four months. The LAB series of indices tries to replicate the aggregate return profiles of hedge fund strategies using liquid, tradable instruments.
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A former Lehman Brothers economist has announced he wants to start a hedge fund. John Llewellyn, 69, was global chief economist at Lehman Brothers before the investment bank’s collapse in 2008, has announced he plans a fund that will back three or four macro themes. He also said he has a seeding firm as a partner.
