The Wall Street Journal late this past week reported that Baron Capital Group Inc., which is the largest outside shareholder in Sotheby's Holdings, Inc., had hired investment bankers Wasserstein Perella & Co. to advise the mutual fund firm "with respect to ... investments" in Sotheby's. The implications, according to sources cited by WSJ were that the firm might be moving to try and shake up the board of the auction house and take a more activist role. The details came out in a filing by Baron with the Securities and Exchange Commission.
Sotheby's stock has dropped from a high of $47 to about a third of that value over the past year, partly as a result of the Department of Justice probe and subsequent legal fallout, which has centered on the auction house's former Chairman, A. Alfred Taubman, and its former president, Diana D. Brooks. While Taubman and Brooks resigned their positions on Feb. 23, they still remain on the board. Taubman has 63% voting control of the company through his ownership of Class B shares.
Baron owns over 55% of the class A stock of Sotheby's but doesn't currently control any seats on the board. That may change as early as April 27 when the board is due to meet in London for its annual stockholder's meeting. (Editor's note: the Sotheby's board meeting was postponed.)
Baron's ownership stake gives the money-management concern enough votes to elect four of the 14 members of the board, all of whom are up for election. Shareholders of the auction house's Class B shares, controlled by Taubman, which have 10 votes per share compared with one for the Class A shares, have the right to elect the other 10 board members.
Whether Baron will launch a proxy battle to get seats on the board is still an open question. Baron Capital declined to give any detailed comment on the filing.
In its filing with the SEC, Baron did say it "strongly supports" Sotheby's current management team and the firm's business strategy. Morty Schaja, president of Baron Capital, says, "We couldn't be more optimistic about the opportunities for the company than we are today."
According to WSJ's report, Baron loaded up on Sotheby's stock over the past three years, accumulating 20.1 million shares, at an average purchase price of about $21 per share. The firm, which is by far the largest outside shareholder, has continued to buy stock as the price has slid, most recently grabbing 243,500 shares over the past two months. The stock is currently just above $16-1/2.
In response to the Baron's filing, a Sotheby's spokesman would only say that "Mr. Baron is our largest shareholder, we listen to what he has to say very carefully and we will continue to do so." The auction company says the mutual fund's manager Ron Baron recently met with non-executive Chairman Michael I. Sovern to discuss Baron Capital's investment in Sotheby's.
Novak has over 48 years experience in the photography-collecting arena. He is a long-time member and formerly board member of the Daguerreian Society, and, when it was still functioning, he was a member of the American Photographic Historical Society (APHS). He organized the 2016 19th-century Photography Show and Conference for the Daguerreian Society. He is also a long-time member of the Association of International Photography Art Dealers, or AIPAD. Novak has been a member of the board of the nonprofit Photo Review, which publishes both the Photo Review and the Photograph Collector, and is currently on the Photo Review's advisory board. He was a founding member of the Getty Museum Photography Council. He is author of French 19th-Century Master Photographers: Life into Art.
Novak has had photography articles and columns published in several newspapers, the American Photographic Historical Society newsletter, the Photograph Collector and the Daguerreian Society newsletter. He writes and publishes the E-Photo Newsletter, the largest circulation newsletter in the field. Novak is also president and owner of Contemporary Works/Vintage Works, a private photography dealer, which sells by appointment and has sold at exhibit shows, such as AIPAD New York and Miami, Art Chicago, Classic Photography LA, Photo LA, Paris Photo, The 19th-century Photography Show, Art Miami, etc.
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