Just days after Sotheby’s was hit with two lawsuits in New York another shareholder has filed a claim against the auction house in response to its agreement to be acquired by French-Israeli telecom magnate Patrick Drahi, through his company BidFair, for $3.7 billion.
The new lawsuit is brought by Michael Kent, who is seeking class-action status for the suit, which was filed yesterday in a US District Court in Delaware. Like the previous suits, Kent names CEO Tad Smith, board chairman Domenico de Sole, deputy board chair Peregrine Andrew Morny Cavendish, and numerous board members as defendants.
Kent alleges that Sotheby’s recent proxy statement, a document that provides information for shareholders, which it filed with the Securities and Exchange Commission on July 12, “omits material information” and is “false and misleading.”
Sotheby’s reiterated its previous statement on the earlier lawsuits: “As the vast majority of all public company mergers over $100 million are the subject of shareholder litigation, the lawsuits filed were expected and routine. We do not expect the suits to have any impact on our targeted closing timing of the fourth quarter of this year.”
Kent, whose attorneys did not immediately respond to a request for comment, says in the suit that he’s seeking class-action status because “the prosecution of separate actions by individual members of the Class would create the risk of inconsistent or varying adjucations.”
There are nearly 47 million outstanding shares of Sotheby’s common stock “held by hundreds, if not thousands, of individuals and entities scattered throughout the country,” he says.
Kent is requesting the court stop Sotheby’s and its directors from “proceeding with, consummating, or closing the Proposed Transaction…[and] to disseminate a Proxy Statement that does not contain any untrue statements of material fact.” He is also seeking judgment for costs of the action including attorney and experts’ fees.
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