Despite a bitter eight-month battle that produced a flurry of insults and countercharges, auction house Sotheby’s has come to an agreement with its largest shareholder, Third Point, and will allow its handpicked slate seats on its board.
The agreement comes one day before the company investors were due to vote on Third Point’s slate at the company’s annual meeting.
With the new agreement, Sotheby’s board will expand to 15 members, and Third Point CEO Daniel S. Loeb, restructuring expert Harry J. Wilson, and jewelry industry veteran Olivier Reza will join its board, as well as previously announced independent directors Jessica Bibliowicz and Kevin C. Conroy.
Loeb launched his battle in October, after accumulating more than 9 percent of the company’s stock. In an extraordinary letter, he called for chairman, president, and CEO William Ruprecht to resign, calling Sotheby’s “an old master painting in desperate need of restoration.” In response, the board enacted a “poison pill” to prevent further accumulation of stock, which Loeb unsuccessfully tried to get nullified by court order.
In April, Loeb launched a spirited proxy campaign, which included erecting a now-taken-down website, to elect himself, Wilson, and Reza to the board at Sotheby’s May 6 annual meeting. In response, Sotheby’s took aim at Loeb’s track record of so-called activist investing, saying he had not proven he could “work constructively” at the board level, and declaring his slate would add “no incremental, relevant skills, experience, or expertise” to the board.
Now, with open hostilities apparently in the past, Ruprecht said in a statement that the board “will benefit from five fresh voices and viewpoints.”
Loeb said his slate “sees [itself] not as the Third Point nominees but as Sotheby’s directors, and we expect to work collaboratively with our fellow board members.”
The agreement also calls for the so-called “poison pill” to be lifted, but caps Third Point’s ownership of Sotheby’s at 15 percent.