In a bid to discourage a hostile takeover by investor Daniel S. Loeb, Sotheby's auction house filed a shareholder rights plan with the Securities and Exchange Commission on Friday. The plan creates hurdles for parties wishing to gain control of the company by diluting the value of an investor's shares if he gains control of more than 10 percent of the house's shares. That number is 20 percent for institutional investors, or those eligible to report their holdings on a Schedule 13G.

Sotheby's said in a press release that the rights plan will not in itself prevent a takeover, but said it "should encourage anyone seeking to acquire the Company to negotiate with the Board prior to attempting a takeover." The plan, according to the auction house, is designed to "protect Sotheby's and its shareholders from efforts to obtain control that are inconsistent with the best interests of the company and its shareholders."

Loeb, 51, is CEO of New York hedge fund Third Point LLC, which holds 9.3 percent of the company's outstanding shares. He sent Ruprecht a letter last week complaining about lagging performance, a corporate malaise and Ruprecht's compensation.

Loeb has brought his brand of activist investment to Sotheby's tony doorstep. "I am willing to join the board immediately and help recruit several new directors who have experience increasing shareholder value, share a passion for art, understand technology and luxury brands, or have operated top-performing sales organizations," Loeb wrote, and concluded, "It is also time, Mr. Ruprecht, for you to step down from your positions as Chairman, President and Chief Executive Officer and for the role of Chairman to be separated for your successor."