NEW YORK (AP) — Auction house Sotheby's reported a narrower loss in its first quarter from a year ago, thanks to strong demand for artwork around the world. But its shares fell Wednesday after it revealed it will have to pay $10 million to its biggest shareholder Third Point in the second quarter after the activist investor firm won a battle to shake up Sotheby's board.
The New York company said that it expects to incur between $12 million and $15 million in second-quarter charges, of which $10 million will go to Third Point LLC.
Since last fall, Third Point and its CEO Daniel Loeb have pushed Sotheby's to restructure its business and change its board of directors. On Monday, Sotheby's said it will add Loeb to its board of directors, as well as former investment banker Olivier Reza and restructuring expert Harry J. Wilson.
The $10 million is to reimburse Third Point's expenses for the proxy fight, Sotheby's Chief Financial Officer Patrick McClymont said during a conference call with analysts.
In the first quarter, Sotheby's said it incurred $5.7 million in charges related to the Third Point proxy fight.
Shares of the company fell $2.05, or 4.7 percent, to close at $41.55 Wednesday.
The auction house reported a loss of $6.1 million, or 9 cents per share, in the quarter ending March 31, compared with a loss of $22.3 million, or 33 cents per share, in the same quarter a year ago. Revenue jumped 54 percent to $156.8 million from $101.7 million.
Analysts expected a loss of 13 cents per share and revenue of $129.4 million, according to FactSet.