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

The auction house is facing off against two hedge funds


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

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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.

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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,

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