Sotheby's adopted a "poison pill" to ward off an unwanted takeover, two days after activist investor Daniel Loeb's Third Point announced that it raised its stake in the auctioneer and called for its chief executive, William Ruprecht, to step down.
The company said the shareholder rights plan would be triggered if a person or group acquired 10 percent or more of its shares.
Third Point has raised its stake to 9.3 percent, making it Sotheby's largest shareholder.
"Sotheby's is like an old master painting in desperate need of restoration," Mr. Loeb wrote in a filing with the U.S. Securities and exchange Commission.
"Poison pills" are designed to dilute holdings of an investor should its stake exceed a given threshold.