Sotheby's shares jump as Loeb wins support
Fuel has been added to the fire that first erupted at Sotheby's when high-profile activist investor Daniel Loeb targeted one of the world's best-known auction houses for its financial performance.
ISS, an adviser on corporate governance to institutional investors, has recommended Sotheby's shareholders vote to add Mr Loeb and Olivier Reza, a jewellery entrepreneur, to the board of the auction house.
The recommendation is a victory for Mr Loeb, whose hedge fund Third Point is Sotheby's largest shareholder, as both he and Sotheby's management lobby investors before the auction house's annual meeting on May 6.
In its report, ISS said Mr Loeb, who has engineered management shake-ups at companies including Yahoo, brings:
The sort of deep financial and analytic acumen which, had it also been given voice in the boardroom over the past four years, might have prevented a "record" year in which the company's second-highest revenues in a decade could only deliver one of its lowest EBITDA margins of the same period.
However, ISS failed to back Harry Wilson, a restructuring executive and the third candidate that Third Point is seeking to put on Sotheby's board.
Sotheby's rejected the analysis from ISS, arguing that replacing its board members with Mr Loeb's picks could "negatively impact shareholder value."
Late on Wednesday, the auction house unexpectedly released first-quarter results that showed a sharp narrowing in its losses from a year earlier.
Shares in Sotheby's climbed almost 4 per cent at the open in New York.