Sotheby's reaches deal with activist investor Daniel Loeb

NEW YORK - Auction house Sotheby's (BID) says it agreed to expand its board to add directors from activist investor Daniel Loeb's slate.

Sotheby's will add Loeb, CEO of hedge fund Third Point, as well as former investment banker Olivier Reza and restructuring expert Harry J. Wilson to its slate of directors up for election at its annual shareholder meeting later this month.

Third Point is Sotheby's largest shareholder with a 9.6 percent stake.

The board will expand to 15 members, including 13 independent directors.

New York-based Sotheby's will also end its one-year shareholder rights plan that caps Sotheby's share ownership at 15 percent. Third Point had sued Sotheby's over this plan.

Shares fell 62 cents to $42.77 in morning trading. The stock is down 18 percent this year.