June 17, 2019 at 10:29am
MEDIA MOGUL PATRICK DRAHI BUYS SOTHEBY’S AUCTION HOUSE FOR $3.7 BILLION
Patrick Drahi.
Sotheby’s, the only major publicly traded auction house, will be acquired by BidFair USA, owned by collector and telecommunications entrepreneur Patrick Drahi, in a deal worth $3.7 billion. Under the merger agreement, which was announced by Sotheby’s earlier today, stakeholders will receive $57 in cash per share of common stock. If approved, the transition will mark the 275-year-old auction house’s return to private ownership after thirty-one years on the New York Stock Exchange.
“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 CEO 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.”
Domenico De Sole, chairman of Sotheby’s board of directors, added: “Following a comprehensive review, the board enthusiastically supports Mr. Drahi’s offer, which delivers a significant premium to market for our shareholders.” According to the New York Times, following the announcement, Sotheby’s shares rose more than 55 percent Monday morning.
The Israeli-French media tycoon is the founder, board president, and controlling shareholder of Altice Europe. Since he established the company in the Netherlands in 2001, Drahi has built it into a multinational, broadband, telecommunications, media, digital, and advertising company. Serving 30 million customers, Altice operates primarily in France, Portugal, Israel, and the Caribbean. Altice also acquired Cablevision in 2016 and provides services in twenty-one states, including New York, New Jersey, and Texas.
Commenting on the agreement, Drahi said: “I am honored that the board of Sotheby’s has decided to recommend my offer. Sotheby’s is one of the most elegant and aspirational brands in the world. As a longtime client and lifetime admirer of the company, I am acquiring Sotheby’s together with my family. We thank Domenico and the rest of the Sotheby’s board for its support and look forward to getting started with Tad and the wonderful members of his team to define our future.”
Telecom billionaire Patrick Drahi will buy Sotheby’s for $3.7 billion and take it private.
Patrick Drahi. Photo by Eric Piermont/AFP/Getty Images.
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.
