(Bloomberg) -- Sotheby’s agreed with its largest shareholder, China’s Taikang Insurance Group, to find an independent director for the auction house’s board.
Taikang will not seek to increase its stake until Nov. 6 or team up with other investors, as long as the director search is ongoing, New York based Sotheby’s said in a filing Friday. Once the search is successful, Taikang plans to enter a support and standstill agreement, Chairman and Chief Executive Officer Chen Dongsheng wrote in a letter to the auction house.
Chen is also the founder and president of one of China Guardian, one of the country’s largest auction houses. In July, his Taikang disclosed that it owned about 14 percent of the auction house, which also counts activist investors Third Point and Marcato Capital Management among its top holders. The Chinese insurer said at the time that it may seek board representation.
“We welcome Taikang’s investment in Sotheby’s and are optimistic about its support for our strategic initiatives,” the auction house said in a statement. “We also appreciate Taikang’s assistance to recruit a highly qualified independent director from Asia and remain focused on executing outstanding results for our clients and shareholders.”
Sotheby’s has been looking for a new board member with experience in Asia for several months, according to Lauren Gioia, the company’s worldwide director of communications. This year the company lost two directors: John Angelo, who had been on the board since 2007, died in January, and Robert Taubman, who served for 16 years, stepped down in May.
If the director search ceases for any reason, Taikang or Sotheby’s may terminate the agreement on 10 days’ prior written notice to other party, according to the filing.