Once the target of hedge-fund manager Daniel Loeb’s criticism, Sotheby’s Chief Executive Officer William Ruprecht got the activist shareholder on his side two weeks after he was voted onto the board of directors.
In a letter to Sotheby’s staff, the board, including Loeb, said it was standing “behind the management team led by Bill Ruprecht.”
It’s a turnaround for Loeb, whose Third Point LLC is the largest Sotheby’s shareholder. Loeb attacked Sotheby’s for months, criticizing aspects of the auction house’s business ranging from its deteriorating competitive position compared with rival Christie’s to Ruprecht’s privileges that “invoked the long-gone era of imperial CEOs.”
After a bitter proxy fight, Sotheby’s appointed to the board Loeb and two of his candidates, jewelry designer Olivier Reza and Harry J. Wilson, who helped restructure General Motors Co. Third Point and Sotheby’s agreed to expand the board to 15 members from 12. Third Point owns 9.65 percent of Sotheby’s shares, according to a regulatory filing.
The letter was signed by Loeb, Reza and Wilson, who were seen smiling while mingling with Ruprecht and other board members at a shareholders meeting on May 29.
“Your efforts have produced strong results in most of our businesses and the company is off to a record this year,” the board said in its letter to employees.
Sotheby’s London auctions this month include Claude Monet’s painting of water lilies, estimated at 20 million pounds to 30 million pounds ($33.6 million to $50.4 million).
The New York Times earlier reported the Sotheby’s letter.
Sotheby’s shares closed down 1 percent to $39.74 in New York trading. Shares are down 18 percent this year including reinvested dividends.