Subject: Third Point and Sotheby's
From: "Arlene Busch" <[email-masked]>
To: "'Eric Schwerin'" <[email-masked]>, "Hunter Biden" <[email-masked]>
Date: Mon, 5 May 2014 20:28:10 +0000

Sotheby's said on Monday that it had ended its fight with the hedge fund mogul Daniel S. Loeb, agreeing to add his three director nominees to its board.

The last-minute settlement - reached a day before investors were scheduled to vote on the board - represents a clear win for Mr. Loeb, the veteran activist investor who has waged a monthslong fight against Sotheby's in a bid to shake up the 270-year-old auction house.

The fight had become one of the biggest and most intense battles between a company and an activist this year, with each side hurling insults at the other.

Under the terms of their agreement, Sotheby's will expand its board by three, to 15, to take on the activist's full slate of nominees: Mr. Loeb himself, the restructuring expert Harry Wilson and the former investment banker Olivier Reza.

And Mr. Loeb's firm, Third Point, will be allowed to raise its stake to 15 percent from its current level of 10 percent. The hedge fund had sued Sotheby's in Delaware's Court of Chancery, arguing that a "poison pill" defense plan that limited him to a 10 percent stake while letting mutual funds acquire up to a 20 percent stake was unfair.

Late on Friday, the vice chancellor overseeing the case declined to overturn the poison pill.

Daniel S. Loeb, the founder of Third Point.
Steve Marcus/Reuters
Daniel S. Loeb, the founder of Third Point.
The company will effectively push back its annual meeting to sometime later in the month.

"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 F. Ruprecht, Sotheby's chairman and chief executive, 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."

Mr. Loeb added, "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."

Arlene Busch
312-498-9595
[email-masked]<mailto:[email-masked]