Sotheby's Takes Poison Pill After Loeb Attack

Oct 4 2013 | 11:01am ET

Sotheby's today responded to the blistering letter it received this week from Third Point's Daniel Loeb, adopting a poison pill that will keep the hedge fund from boosting its stake in the auction house much further.

The shareholder-rights plan will effectively prevent any non-passive investor from buying more than 10% of Sotheby's shares. Third Point is the company's largest shareholder with a 9.3% stake.

In a letter to Sotheby's CEO William Ruprecht this week, Loeb, a major art collector and Sotheby's client, demanded Ruprecht's departure and a seat on the company's board, decrying what he called a "lack of leadership and strategic vision at its highest levels," its "chronically weak operating margins and deteriorating competitive position" and "dysfunctional division and a fractured culture."

Sotheby's called Loeb's criticisms "incendiary and baseless."

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