UPDATE: Sotheby's Responds, Believes Board is Best Positioned for Growth

Sotheby's (NYSE: BID) today issuedthe following statement regarding notice from Third Point LLC submittingnomination for three candidates to stand for election to Sotheby's Board ofDirectors at the Company's 2014 Annual Meeting:Sotheby's has engaged in extensive discussions with Third Point over the pastmonths in an effort to reach a resolution that would avoid a proxy battle. Aspart of these discussions, Sotheby's offered to appoint Daniel S. Loeb to theSotheby's Board of Directors, where he would also serve on three committees –the Nominating and Governance Committee, the Audit Committee and the FinanceCommittee – and proposed customary standstill arrangements.Sotheby's is disappointed that Third Point has chosen this path. Sotheby's hada solid 2013 and 2014 is off to a strong start, with record auction results inmany categories, a $300 million special dividend payable to shareholders nextmonth, and a commitment for disciplined investment and ongoing capitalreturn.   Third Point's actions are particularly unfortunate given the efforts thatSotheby's has made to reach an agreement with Mr. Loeb. These efforts haveincluded: * Sotheby's offer to appoint Mr. Loeb to the Board of Directors, with roles on three key Board committees; * Sotheby's proactively shared non-public information with Third Point (under a standard confidentiality agreement) and considered its views in developing the Company's recently announced Capital Allocation and Financial Policy Plan and other initiatives; * Feedback from Mr. Loeb, who, in conversations with management, characterized the Company's Capital Allocation and Financial Policy Plan as the "right approach," striking a balance between returning capital to shareholders and continuing to invest in the business; * Six meetings with Third Point since August 2013, three of which included the lead independent director of Sotheby's; and * Numerous conference calls with Third Point and members of the Company's Board of Directors and management team.Sotheby's Board of Directors and management team are committed to deliveringvalue for all Sotheby's shareholders. The Company believes the new CapitalAllocation and Financial Policy Plan, together with actions Sotheby's hastaken to increase competitiveness and bring complementary expertise to theBoard and the leadership team, best position Sotheby's to build value for itsclients and shareholders now and in the future.   Domenico De Sole, Sotheby's Lead Independent Director, stated, "Sotheby's isstrongly positioned today, with a strategy and executive leadership team ledby Bill Ruprecht that has the full confidence of the Board. This team and thisstrategy are delivering exceptional results for Sotheby's clients and value toSotheby's shareholders. The strength of the Company is reflected in Sotheby'sstock price, which remains near historic highs and has exceeded the S&P Midcapindex over the one, five and ten year periods."Sotheby's believes that its Board is best positioned to support the Company'scontinued growth and success. The Board is composed of 12 highly qualifieddirectors, 10 of whom are independent, and three of whom joined the Board inthe past three years. The directors are active and engaged, with a diversityof professional backgrounds including experience leading and profitablygrowing other public and private companies with global luxury brands.Directors also have experience in relevant disciplines, including marketing,finance, banking, real estate, client services and law, and have demonstratedsuccess leading corporate change and value creation through financings,capital allocation strategies, and business development.The Board's Nominating and Corporate Governance Committee will consider theThird Point nominations in due course. The Board will present its recommendedslate of director nominees in Sotheby's definitive proxy statement and othermaterials, including the Company's WHITE proxy card, to be filed with theSecurities and Exchange Commission and mailed to all shareholders eligible tovote at the 2014 Annual Meeting, which has yet to be scheduled. Sotheby'sshareholders are not required to take any action at this time.Goldman, Sachs & Co. is serving as financial advisor to Sotheby's, andWachtell, Lipton, Rosen & Katz is legal advisor.