Global art business Sotheby's (NYSE:BID) has filed a statement with the SEC to implement a stockholder rights plan. The development comes two days after Daniel Loeb, CEO of Sotheby's largest shareholder, Third Point LLC, sent a letter to Sotheby's CEO William Ruprecht, in which he asked to be placed on the company's board of directors and for Ruprecht to step down.
Sotheby's has adopted the new rights plan "to protect stockholders from coercive or otherwise unfair takeover tactics." To do this, the plan imposes a "significant penalty" on any investor holding 10% or more of common stock. Third Point currently owns 9.3% of these shares.
Under the terms of the new Rights Agreement, the company has appointed software company Computershare as its Rights Agent, which will enforce the terms of the agreement accordingly. Sotheby's also plans to pay investors a preferred share purchase right of $0.01 per share of common stock, which will be payable Oct. 14 for shareholders of record as of the same date.
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