Loeb Plans a Proxy Fight at Sotheby’s

Sotheby’s announced plans last month to pay out $450 million to investors and change up its business, in an effort to quell restive shareholders.

But the most vocal of them all, the activist investor Daniel S. Loeb, still appears dissatisfied.

Mr. Loeb’s hedge fund, Third Point, disclosed in a regulatory filing on Thursday that it was seeking three seats on the auction house’s board. The proposed slate consists of Mr. Loeb; Harry Wilson, a restructuring expert who served with Mr. Loeb on the board of Yahoo until several months ago; and Olivier Reza, a former investment banker who is now the head of the House of Alexandre Reza, a Parisian jeweler.

The filing on Thursday sets the stage for a battle between Sotheby’s and one of the most vocal activist investors in the business, one who has long argued that the auction house need a financial overhaul to better compete against the likes of Christie’s. Mr. Loeb, who claims an economic interest in about 9.5 percent of the company’s shares, has likened the auction house to “an old painting in desperate need of restoration.”

Other activists have also descended on the company, including Mick McGuire of Marcato Capital Management.

In the plan unveiled last month, Sotheby’s will return $450 million to shareholders through stock buybacks and special dividends, as well as  separate its agency and financial services units.

“We commend the company for taking some action following our filing and believe these expeditious improvements demonstrate the benefits of engaging with shareholders,” Third Point wrote in its filing.

But it added, “We believe these prompt and long overdue developments make the case that the company and all shareholders will benefit from having an owner’s perspective in the boardroom.”

In Third Point’s filing, the hedge fund argued that the existing directors own less than 1 percent of Sotheby’s shares. The firm also pointed to the company’s shareholder rights plan â€" meant to prevent anyone from accumulating too big a position in the stock â€" as a sign of entrenchment.

Third Point added that with the majority of Sotheby’s board having served for more than seven years, it lacked the independence necessary to take a clear look at what improvements were still needed. Not even the addition of Domenico De Sole, the chairman of the luxury fashion house Tom Ford, was enough.

“All shareholders will benefit from further depth of experience in Sotheby’s key business building block: luxury customer relationship development,” Third Point wrote.

A representative for Sotheby’s did not have an immediate comment on the filing.