International art auction house Sotheby’s (NYSE: BID) said Monday it has agreed to add hedge fund activist investor Daniel S. Loeb and two of his colleagues as director nominees to its board, ending a months-long battle.
The settlement was reached a day before investors were scheduled to vote on director nominees and is a clear win for Loeb and his Third Point hedge fund.
Under the settlement terms, the New York auction house will expand its board by three, to 15, to accept Loeb’s nominees: Loeb himself, former investor and restructuring expert Harry Wilson and former investment banker Olivier Reza.
Also, Third Point will raise its maximum stake to 15 percent from 10 percent. The firm had sued Sotheby’s in a court in Delaware, arguing that limiting Third Point to a 10 percent stake while letting mutual funds acquire up to 20 percent was unfair. That litigation is being withdrawn. Sotheby's said it will accelerate the termination of its one-year shareholder rights plan.
“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,” William Ruprecht, Sotheby’s chairman and CEO, said in a statement. “This agreement ensures that our focus is on the business and that we will benefit from five fresh voices and viewpoints.”
Loeb also said in a statement, “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.”
Sotheby’s is pushing back its annual meeting to sometime later this month, where a vote will be held for the board appointments.