Billionaire Patrick Drahi agrees to buy Sotheby's in $3.7 billion deal

Reuters Paris, France Jun 17, 2019, 10.03 PM(IST)

File photo. Photograph:( AFP )

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Sotheby's said it had signed a definitive agreement to be acquired by BidFair USA, an acquisition vehicle set up by Drahi, which had offered $57 in cash per share to buy out Sotheby's.

Patrick Drahi, the billionaire behind telecoms and media group Altice, agreed on Monday to buy historic art auction house Sotheby's in a deal worth $3.7 billion on an enterprise value basis.

Sotheby's said it had signed a definitive agreement to be acquired by BidFair USA, an acquisition vehicle set up by Drahi, which had offered $57 in cash per share to buy out Sotheby's.

The offer represented a premium of 61% to Sotheby's closing price on Friday. It will also result in Sotheby's returning to private ownership after 31 years as a public company whose shares were traded on the New York market.

The acquisition will also allow avid art collector Drahi to join rival French billionaire Francois Pinault at the top of the art world, with Pinault's financial holding company Artemis owning a majority stake in Sotheby's rival Christie's.

"Patrick Drahi is one of the most well-regarded entrepreneurs in the world, and on behalf of everyone at Sotheby's, I want to welcome him to the family," Sotheby's chief executive Tad Smith said in a statement.

"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. It positions us very well for our future and I strongly believe that the company will be in excellent hands for decades to come with Patrick as our owner," he added.

Sotheby's about five years ago ended a long-running fight with activist investor Daniel Loeb's hedge fund Third Point, by asking Loeb and two associates to join the Sotheby's board, and Loeb was instrumental in hiring Smith as CEO.

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

The price "affirms the value we saw when we first invested in Sotheby’s, and rewards long-term investors like Third Point who believed in its potential," Loeb told Reuters.

BNP Paribas and Morgan Stanley advised Drahi's Bidfair vehicle on the deal, while LionTree Advisors worked on behalf of Sotheby's.

Sotheby's was founded in London in 1744, and expanded overseas in the 20th century, moving to New York in 1955, Asia and France in 2001.

Famous items sold by Sotheby's include the collections of the late Duchess of Windsor, the personal collection of artist Andy Warhol and Edvard Munch's painting "The Scream" in 2012.