Sotheby's Responds To Hedge Fund Criticism

Jan 29 2014 | 12:02pm ET

Sotheby's has offered an rich olive branch to the activist hedge funds seeking to shake up the staid auction house.

Sotheby's said today that it would pay out a special dividend and open a share buyback program, returning $450 million to shareholders. It also pledged to split its agency and financial services businesses.

The move comes four months after Third Point demanded the resignation of Sotheby's CEO William Ruprecht, among other major changes designed to improve returns for shareholders. Third Point's call was echoed by Marcato Capital Management, which today dismissed the moves.

"Sotheby's can and should return a total of $1 billion of capital to shareholders within 12 months," it said. Third point did not comment on the Sotheby's plan.

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