Following Dan Loeb’s announcement that his Third Point has raised its stake in the auctioneer to 9.3 percent and called for its chief executive, William Ruprecht to step down, Sothebys (NYSE:BID) have adopted a “poison pill” to thwart Mr. Loeb. “Poison pills” are designed to dilute holdings of an investor should its stake exceed a given threshold.

Dan Loeb

Dan Loeb doesn’t seemed to care that Sothebys (NYSE:BID) recently replaced its CFO for a former Goldman Sachs partner and managing director. Nor is the billionaire hedge fund manger satisfied that the auction house has opened its books for review in order to increase shareholder value.

“Sotheby’s is like an old master painting in desperate need of restoration,” Mr. Loeb wrote in a recent filing with the SEC announcing that he and his fund were now the largest shareholder at 9.3 percent. Mr. Loeb believes that a “crisis of management” has created “dysfunctional divisions and a fractured culture.”

“As with any important restoration, Sothebys (NYSE:BID) must first bring in the right technicians,” Mr. Loeb added. He has also stated his desire to be named to the board immediately, while it recruits several new directors and a new chief executive. Dan Loeb also made it clear that he no longer wants the chief executive to also serve as chairman.

Dan Loeb blasted Sotheby’s management

Dan Loeb’s belief that a change in its chief executive is necessary due to a lack of leadership, excessive pay and perks that has become the culture at Sotheby’s as well as Sotheby’s loss of relevance in its competition with rival auction house Christie’s. Sotheby’s has called this “baseless” and cited their soaring stock price as evidence of Loeb’s shortsightedness.

Dan Loeb blasted Sotheby’s management but took specific aim at CEO Ruprecht’s “generous pay package and scant stock holdings,” and “a perquisite package that invokes the long-gone era of imperial CEOs: a car allowance, coverage of tax planning costs, and reimbursement for membership fees and dues to elite country clubs.”

Sotheby’s immediately responded to Loeb’s vitriol with the following. ”Rather than debating incendiary and baseless comments, we are focused on serving our clients’ needs during this critical autumn sales season,” Sotheby’s said in a statement, it also pointed out that its share price has dwarfed that of the S&P midcap index over one, five, and ten year periods.

Dan Loeb began his buying spree in early August

Lowb and Third Point have spent $266 million swallowing up 6.35 million shares of the auction house. Dan Loeb began his buying spree in early August and has gained additional traction by selling put options on an additional 2.13 million shares. The average price that Loeb has paid for is holdings is $41.69 per share and the strike price of the options he sold were between $45 and $46 per share.

Dan Loeb will not be easily brushed away by Sotheby

Dan Loeb will not be easily brushed away by Sothebys (NYSE:BID) if you count the company he keeps. Nelson Pelz’s Trian owns around 3 percent while Mick McGuire’s Marcato Captital Management holds an additional 6.7 percent. In a recent filing it was also revealed that Morgan Stanly holds 2.4 percent of the company.