London: Sotheby’s, the auction house whose shares have dropped 40 per cent in the past year, is being sold to telecom titan Patrick Drahi for $2.7 billion.
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Investors will receive $57 in cash per share of Sotheby’s common stock under terms of the agreement, according to a statement on Monday from the New York-based company. The offer represents a 61 per cent premium to the closing price on Friday. Sotheby’s shares rose 57 per cent to $55.58 as of 9:40am in New York. The enterprise value is $3.7 billion.
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Sotheby’s is returning to private ownership after 31 years as a public company, the last few spent battling expenses and margins even as masterpieces and contemporary works soared in value. Drahi, 55, is the president of Altice Europe NV, a publicly traded telecommunications business with more than 30 million customers. An avid art collector, he’s worth $8.6 billion, according to the Bloomberg Billionaires Index.
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“Sotheby’s is one of the most elegant and aspirational brands in the world,” Drahi said in the statement. “As a longtime client and lifetime admirer of the company, I am acquiring Sotheby’s together with my family.”
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Drahi’s latest purchase is a surprise move for a man known for the telecoms empire he built, which grew out of a string of debt-financed acquisitions in France before eventually expanding to the US in 2015. Drahi said he intends to monetise a small piece of the US business for as much as $400 million to fund the Sotheby’s deal.
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Altice Europe’s main asset is SFR in France. The business is finally returning to growth after years of customer losses amid cut-throat competition for subscribers in France. Shares in Altice Europe have gained more than 70 per cent this year.
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Drahi’s takeover would mean that French citizens will own the world’s two major auction houses. The family of Francois Pinault, founder of Paris-based luxury goods giant Kering SA, owns Christie’s after first buying a 29.1 per cent stake in the company from British billionaire Joe Lewis two decades ago.
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“It was ripe for Sotheby’s to go private,” said Philip Hoffman, chief executive officer of the Fine Art Group and a former Christie’s executive. “Christie’s has more advantages being run privately and not having public quarterly reporting that puts pressure on their ability to do deals.”
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LionTree Advisors is advising Sotheby’s, while BNP Paribas and Morgan Stanley working with BidFair, an entity controlled by Drahi. BNP Paribas is sole financing provider.