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

by Christopher Freeburn | January 29, 2014 10:39 am

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

Under pressure from activist investors, Sotheby’s (BID[1]) says it will repurchase BID stock and issue a special dividend[2].

sothebys 630 300x225 BID Stock   Sotheby's Shares Rise on Special Dividend Announcement[3]
Source: Flickr[4]

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.

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[5]. 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.

Endnotes:
  1. BID: http://studio-5.financialcontent.com/investplace/quote?Symbol=BID
  2. will repurchase BID stock and issue a special dividend: http://in.reuters.com/article/2014/01/29/us-sothebys-specialdividend-idINBREA0S12R20140129
  3. [Image]: http://investorplace.com/wp-content/uploads/2012/05/sothebys-630.jpg
  4. Flickr: http://www.flickr.com/photos/michaelhenley/
  5. called for Sotheby’s CEO to step aside: http://investorplace.com/2013/10/sothebys-bid-adopts-a-poison-pill-to-ward-off-dan-loeb/#.Uuke9XlhOf0

Source URL: http://investorplace.com/2014/01/bid-stock-sothebys-shares-rise-special-dividend-announcement/
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