At a time when Sotheby’s has been focused on cutting costs and improving its bottom line, it found itself committing what is expected to total as much as $15.7 million for legal and advisory professional services in connection with its losing battle against activist investor Daniel Loeb‘s Third Point.
CLARIFICATION—Not discussed in the conference call, but revealed in the agreement between Third Point and Sotheby’s and the Form 10-Q quarterly report filed by the auction firm today: $5.7 million of the possible $15.7 million represents Sotheby’s expenses in fighting Loeb, while up to $10 million represents Sotheby’s reimbursement of Third Point’s “out-of-pocket, documented expenses,” incurred in connection with this battle.
That was the bombshell today’s conference call with analysts, in which CEO Bill Ruprecht buried the hatchet, saying: “We can only benefit from having five fresh voices (including Loeb and his two other candidates) and viewpoints on our board.” Ruprecht also praised his staff “for their unwavering commitment and dedication to clients during this challenging period….They are the engine that drives this franchise.”
The earnings call came the morning after last night’s kickoff at Christie’s of the two weeks of major spring Impressionist/Modern and Contemporary sales, which (as you can see from my tweets last night) fetched a hammer total of $245.05 million—at the low end of the presale estimate of $243.5-$358.9m. (The total with buyers premium was $285.9 million, but the estimate is based on hammer price.)
It was, as I tweeted, “a solid but lackluster sale,” with no fireworks but with an impressive 89% sold by lot (6 unsold) and a hefty 96% sold by value. Carol Vogel in the NY Times called it “a tepid start.”
Here’s my Twitter chain from this morning’s Sotheby’s conference call:
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