Business / Markets

Chinese life insurance company takes stake in Sotheby's

(AGENCIES) Updated: 2016-07-28 23:01

Taikang Life, one of China's biggest life insurers, has become the single largest shareholder of Sotheby's, the auction house, by acquiring a 13.5 percent stake.

According to a regulatory filing on Wednesday, Taikang owns Sotheby's shares worth around $233 million, ahead of other top investors including Third Point, BlackRock and Point 72 Asset Management. Sotheby's has a market capitalization of $1.84 billion.

Taikang's chairman and CEO is Chen Dongsheng, also the founder and president of China Guardian Auctions Co, one of China's largest auction houses. He is married to Chairman Mao Zedong's granddaughter, Kong Dongmei..

Sotheby's has said that it is in direct competition with China Guardian Auctions in the Chinese art market. China is the third-largest market for Sotheby's, behind the US and the UK. Last week it reported 22 percent year-on-year growth to $461.5 million during the first half of 2016.

Taikang said in the regulatory filing that it had expressed support to Sotheby's board and management for its broader strategic initiatives, "and provided suggestions regarding future director nominations." Such nominations could include persons associated with Taikang, the insurer said.

Tad Smith, Sotheby's chief executive, said in a statement that the auction house's board had met with Taikang's executives and "warmly welcome their support of Sotheby's strategic initiatives." Smith said he expects "all shareholders, clients, and staff will benefit" from the move.

Taikang's filing follows a May disclosure that Singapore-based Sotheby's shareholder Shanda Payment Holdings Ltd is poised to increase its stake. Tianqiao Chen and Chrissy Qian Qian Luo, co-founders of Shanda, owner of 2 percent of Sotheby's, received US antitrust approval allowing them to CEO is

Sotheby's earlier fought a bitter proxy battle with activist Dan Loeb's Third Point LLC. In May 2014, it settled, agreeing to appoint Loeb and his two nominees, Olivier Reza and Harry J. Wilson, to its board. Third Point was Sotheby's largest shareholder until Wednesday's filing, which shows that Taikang has overtaken the hedge fund.

Marcato Capital Management, the activist hedge fund, has also amassed an active 9.7 percent stake. Billionaire trader and collector Steve Cohen's Point72 Asset Management also recently built a 5.5 percent stake.

Taikang, Third Point, Marcato, Point72 and Shanda collectively own about 43 percent of Sotheby's, based on the latest available disclosures.

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