Sotheby's acquired by Patrick Drahi for $3.7B

Going, going, gone: Sotheby’s auction house sold for $3.7bn

Going, going, gone: Sotheby’s auction house sold for $3.7bn

After 31 years as a public company, Sotheby's is going private in a $3.7 billion deal and will be owned by media and telecom entrepreneur Patrick Drahi (pictured below). Sotheby's is one of the most elegant and aspirational brands in the world.

"Now the company can become more flexible and nimble as a privately-held enterprise and it will be interesting to see the changes that will be made", said Abigail Asher, a partner at worldwide art consultants Guggenheim, Asher. Founded in London in 1744, Sotheby's had the distinction of being the oldest company listed on the New York Stock Exchange.

He is the founder and majority shareholder of the Amsterdam-listed telecoms firm Altice, which he built via a string of acquisitions of smaller companies, including landmark deals in the United States that led to the group's American assets being spun off into a separate company.

The deal-which comes only a few months after the company's 275 anniversary in March-calls for BidFair USA, an entity wholly owned by Drahi, to pay $57 to Sotheby's common stockholders.

In 2012, it sold Edvard Munch's The Scream.

Sotheby's stock price has largely swung between $24 per share and $60 per share throughout this decade, as investors have reacted to perceived strengthening and weakening of demand for high-end goods.

That payout reflects a 56.3% premium over the stock's recent 30-day average, Sotheby's said. Before Monday the stock was down 11 per cent in the year to date.

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The businessman said he would not be selling shares in his Altice Europe business, but would be cashing in a small stake in his Altice USA division. Drahi has also been selling non-core assets in recent years to ease concerns over the debt levels of his businesses. Adjusted profit totalled $128.9 million, or $2.48 per share.

Despite controlling influential French media outlets such as leftist bible Liberation and the country's most-watched news channel BFM TV, Drahi has shied away from elite gatherings of France's establishment and spends much of his time between Switzerland, the United States and Israel.

The deal will require approval from the company's shareholders and clearance from regulators but is otherwise expected to become effective in the fourth quarter of this year.

"This acquisition will provide Sotheby's with the opportunity to accelerate the successful program of growth initiatives of the past several years in a more flexible private environment", Sotheby's CEO Tad Smith said in a written statement.

Loeb, a prominent art collector, on Monday praised the sale.

Mr Loeb's Third Point group is the second-biggest investor with a 14% stake.

The boutique advisory firm LionTree is serving as financial advisor to Sotheby's on the deal, while BNP Paribas and Morgan Stanley are acting as financial advisors to BidFair USA.

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