Dan Loeb To Join Sotheby's Board

Sotheby's (NYSE: BID) and Third Point Capital reached an agreement Monday morning that will allow Dan Loeb and two other nominated individuals, Olivier Reza and Harry Wilson, to join the board of directors.

Third Point Capital, the largest shareholder of the company, sued Sotheby's after it initiated its poison pill provision earlier this year. Judge Donald Parsons on Friday, May 2, ruled in favor of Sotheby's, stating, "I find that the plaintiffs have not demonstrated that they have a reasonable probability of success on the merits of their claims."

Regardless, Sotheby's will expand the board to include the three Third Point nominees and will allow the fund to purchase up to 15 percent of the company (the poison pill provision caps activist investment at 10 percent).

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Chairman, President and CEO Bill Ruprecht commented, "We welcome our newest directors to the Board and look forward to working with them, confident that we share the common goal of delivering the greatest value to Sotheby's clients and shareholders. This agreement ensures that our focus is on the business and that we will benefit from five fresh voices and viewpoints."

"Harry, Olivier and I are delighted to join the Sotheby's Board," said Loeb. "As of today we see ourselves not as the Third Point Nominees but as Sotheby's directors, and we expect to work collaboratively with our fellow board members to enhance long-term value on behalf of all shareholders. We are confident this Board will benefit from the perspective of aligned shareholder voices.

"We are committed to working closely with Sotheby's leadership team to unlock shareholder value by pursuing a strategy of sound capital allocation and growth while respecting the best of the Company's rich history, tradition and culture."

Although Loeb is confident he can increase shareholder value, traders do not seem to agree. Shares are down 1.27 percent on the open and were last trading at $42.84.