Sotheby’s revealed on Monday it has signed an agreement to be acquired by the French-Israeli businessman and art collector Patrick Drahi—whose net worth is $9.2 billion, according to Forbes—through his entity BidFair USA.
As part of the deal, valued at $3.7 billion, the auction house would go private, ending its 31-year run as a publicly traded company. If Sotheby’s shareholders approve the deal, each would receive $57 cash per share, a premium of 61 percent of the company’s stock price as of Friday. If approved, the sale is expected to be finalized in the fourth quarter of 2019.
In a statement, Domenico De Sole, the chairman of Sotheby’s board of directors, said:
Following a comprehensive review, the Board enthusiastically supports Mr. Drahi’s offer, which delivers a significant premium to market for our shareholders. After more than 30 years as a public company, the time is right for Sotheby’s to return to private ownership to continue on a path of growth and success.
If Drahi’s acquisition of Sotheby’s goes through, the world’s two leading auction houses will be controlled by French billionaires. Sotheby’s arch rival in the global art auction duopoly, Christie’s, was acquired in 1998 for $1.2 billion by Artemis, a holding company belonging to French billionaire François-Henri Pinault.
In addition to owning BidFair, Drahi is the founder and controlling shareholder of Altice, a European telecommunications company. In 2015 he expanded to the U.S., buying a 70 percent stake in cable company Suddenlink and acquiring Cablevision outright for $17.7 billion, rebranding the pair into Altice USA; the new company has subsequently added other properties, most recently digital news company Cheddar. In 2016, Altice was implicated in the leak of financial documents known as the “Panama Papers,” which revealed the company had dealings with Panamanian law firm Mossack Fonseca in 2008 and 2010. Altice acknowledged working with the firm, but said it did so legally, and not for the purposes of tax evasion.
In a statement, Drahi said:
I am making this investment for my family, through my personal holding, with a very long-term perspective. There is no capital link with Altice Europe or Altice USA. As the future owner, I have full confidence in Sotheby’s management, and hence do not anticipate any change to the Company's strategy. Management and their exceptional teams and talent around the world will continue to operate with my full support.