BID Stock – Sotheby’s Shares Rise on Special Dividend Announcement

The auction house is facing off against two hedge funds

   

BID Stock – Sotheby’s Shares Rise on Special Dividend Announcement

Under pressure from activist investors, Sotheby’s (BID) says it will repurchase BID stock and issue a special dividend.

sothebys 630 300x225 BID Stock   Sothebys Shares Rise on Special Dividend Announcement
Source: Flickr

BID stock rose in Wednesday trading on news of the plan, which will return about $450 million to the 270-year-old auction house’s shareholders. In March, Sotheby’s will pay a $300 million special dividend to investors. It will spend an additional $150 million to buyback BID stock, Reuters notes.

AppleLogo BID Stock   Sothebys Shares Rise on Special Dividend Announcement
AAPL Stock – Carl Icahn Takes Bigger Bite of Apple

Two hedge funds — Mick McGuire’s Marcato Capital Management and Daniel Loeb’s Third Point — have been urging the auction house to return more money to investors since last year.

$450 million may not be enough to appease the hedge funds. Marcato issued a statement indicating that “Sotheby’s can and should return a total of $1 billion of capital to shareholders within 12 months.” Last year, Loeb called for Sotheby’s CEO to step aside. In October, Sotheby’s adopted a “poison pill” defense to discourage a potential takeover bid.

BID stock rose about 2% in Wednesday morning trading. BID stock has risen about 35% over the past 12 months. BID stock closed at $48.88 a share on Tuesday.


Article printed from InvestorPlace Media, http://investorplace.com/2014/01/bid-stock-sothebys-shares-rise-special-dividend-announcement/.

©2014 InvestorPlace Media, LLC

Comments are currently unavailable. Please check back soon.