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NEW YORK, Oct. 4, 2013 (GLOBE NEWSWIRE) -- The Board of Directors of Sotheby's (NYSE:BID) today adopted a shareholder rights plan and declared a dividend distribution of one preferred share purchase right on each outstanding share of the Company's common stock.
The Board adopted the rights plan in response to the recent rapid accumulations of significant portions of Sotheby's outstanding common stock, including through the use of derivatives. It is intended to protect Sotheby's and its shareholders from efforts to obtain control that are inconsistent with the best interests of the Company and its shareholders. The rights plan provides several recognized shareholder protections:
expires automatically in 12 months unless approved by shareholders (in which case it will expire in three years);
has an exception for offers made for all shares of the Company that treat all shareholders equally and that result in the bidder owning a majority of the Company's shares after 100 days;
guards against coercive tactics to gain control without paying all shareholders a premium for that control; and
facilitates the ability of all shareholders to realize the full long-term value of their investment in the Company.
Bill Ruprecht, Sotheby's Chairman and CEO, said: "This action is designed to protect the interests of all of our shareholders. We look forward to continuing to engage in constructive dialogue with our investors regarding our plans for the business, our comprehensive capital allocation and financial review currently underway, and avenues for enhancing and delivering value to our shareholders. Thanks to our exceptional staff, we have truly spectacular property lined up for sale this season and look forward to delivering outstanding results for our clients."
The rights will be exercisable only if a person or group acquires 10% or, in the case of investors who are eligible to report, and do report, their holdings on Schedule 13G, 20% or more of Sotheby's common stock. If a shareholder's beneficial ownership of Sotheby's common stock as of the time of this announcement of the rights plan and associated dividend declaration is at or above the threshold applicable to it (including through entry into certain derivative positions), that shareholder's existing ownership percentage would be grandfathered, but the rights would become exercisable if at any time after such announcement the shareholder increases its ownership percentage by 0.001% or more. Each right will entitle shareholders to buy one one-hundredth of a share of a new Series A junior participating preferred stock at an exercise price of $200.