Sotheby's wasted no time in fortifying itself for a fight with hedge fund manager Dan Loeb on Friday, adopting a shareholder rights plan to counter the activist investor's recently announced stake in the auctioneer and his bill of particulars calling for top-down change at the company.
"This action is designed to protect the interests of all of our shareholders," Sotheby's CEO, Bill Ruprecht, said in a press release on Friday. "We look forward to continuing to engage in constructive dialogue with our investors regarding our plans for the business, our comprehensive capital allocation and financial review currently underway, and avenues for enhancing and delivering value to our shareholders."
In a Thursday letter to Ruprecht, Loeb chided the CEO for a steep salary, superfluous perks and the auction house's anemic digital strategy as it struggles to compete against longtime rival Christie’s.
According to the rights plan, if a person or group acquires 10 percent or 20 percent or more, as applicable, of the company's outstanding common stock, each right will entitle its holder (other than such person or members of such group) to purchase for $200 a number of Sotheby's common shares having a market value of twice such price, the company said.