Sotheby’s, the auction house fending off attacks by the activist billionaire Daniel S. Loeb, dug in its heels on Thursday by rejecting his proposal for new board members and instead selected two others.
In an open letter to shareholders, Sotheby’s said it had carefully considered Mr. Loeb’s director nominations, but said his nominees — which include Mr. Loeb himself — “add no relevant expertise not already represented on the board of directors.”
The company announced that its nominees for two independent directors were Jessica Bibliowicz, a senior adviser to Bridge Growth Partners and the daughter of former Citigroup chief Sandy Weill; and Kevin C. Conroy, a senior executive at Univision Communications. They will replace two departing directors, Steve Dodge and Michael Sovern.
It is the latest turn in a high-profile battle for control of Sotheby’s, the oldest publicly traded company on the New York Stock Exchange. Last summer, Mr. Loeb’s hedge fund Third Point and another hedge fund, Marcato Capital, emerged as the biggest shareholders in the company and began to make calls for change with the business and its leadership.
Kevin Conroy is president of digital and enterprise development at Univision. Amy Sussman/AP Images for Univision
Kevin Conroy is president of digital and enterprise development at Univision.
In October, Mr. Loeb called for a makeover of the company, likening it to “an old painting in desperate need of restoration.” He has called on Sotheby’s chief executive, William Ruprecht, to step down, criticizing him for his multimillion-dollar pay packages and privileges that invoke “the long-gone era of imperial C.E.O.’s.”
At the same time, Mick McGuire of Marcato Capital called for a financial restructuring of the business and said Sotheby’s could produce $1.3 billion in cash if it sold some of its buildings, gave up its dealer operations and restructured its financing.
In a gesture to the two, the company pledged in January to return $450 million to shareholders through stock buybacks and special dividends, and announced plans to restructure some of its business units.
Mr. Loeb, who remained quiet for three months, returned to the fighting ring in February to mount a proxy battle. On Feb. 27, the investor disclosed in a regulatory filing that he sought three seats on the board of the auction house. His proposed slate included Harry Wilson, a restructuring expert and former Yahoo board member; and Oliver Reza, who is head of the Parisian jeweler House of Alexandre Reza.
“All shareholders will benefit from having an owner’s perspective in the boardroom,” Mr. Loeb said in the filing, referring to the fact that the current board members own less than 1 percent of the auction house’s shares.
But on Thursday, Sotheby’s said its board unanimously voted against Mr. Loeb’s recommendations and emphasized in a letter to its shareholders that its business was already competitive and focused on bringing them value.
“Indeed, under the leadership and guidance of your board of directors, Sotheby’s has delivered strong financial performance and superior shareholder returns, including a total shareholder return of 32.5 percent over the last year,” the letter stated.
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