Sotheby’s Shareholders Approve US$3.7bn Sale to French Billionaire Patrick Drahi

Sotheby’s announced on Thursday that its shareholders approved the proposed US$3.7bn acquisition by BidFair USA, an entity wholly owned by French billionaire Patrick Drahi, at a special meeting held in New York. That means the auction house will return to private ownership after 31 years as a public company.

The auction house first announced that it had signed a definitive merger agreement with BidFair USA on 17 June. Under the terms of the agreement, shareholders of Sotheby’s will receive US$57 in cash per share of Sotheby’s common stock in a transaction with an enterprise value of US$3.7 billion.

Four lawsuits had been brought by shareholders in an attempt to stop the sale. The shareholders are claiming “incomplete and misleading disclosures about the deal,” Bloomberg reports. Despite several lawsuits attempting to block the sale, the transaction was approved by a majority of the shareholders, 91 percent of the shares voted in favour of the merger, at Thursday meeting. The closing of the merger is expected to close in the fourth quarter of 2019.

The deal will make Sotheby’s private after 31 years as a publicly traded company on the New York Stock Exchange. It will also mean that the world’s two largest auction houses, Christie’s and Sotheby’s, will be under the control of French billionaires. Since 1998, Christie’s has been owned by Groupe Artémis, the holding company of French businessman François-Henri Pinault.

Patrick Drahi, a French-Israeli businessman, founded the telecom company Altice in 2001 in Europe, and over the course of nearly 20 years, he has turned Altice into a multinational broadband, telecommunications, media, digital and advertising company. Drahi has a net worth of US$9.1 billion and ranks no. 190 on Forbes list of Billionaires 2019. He is also known as a collector of Modern and Impressionist works.

Drahi was born in Casablanca, Morocco, and moved to France with his Jewish family when he was 15 years old. He is a graduate of France’s Ecole Polytechnique, and of Ecole Nationale Supérieure de Télécommunications, where he earned a post-graduate degree in optics and electronics. He currently lives in Geneva, Switzerland, with his wife.

Sotheby's first sale took place in 1744 in the Exeter Exchange in London's Strand

Founded in 1744 by British entrepreneur Samuel Baker, Sotheby’s focused exclusively on book sales before expanding into other fields at the end of the 19th century. Sotheby’s became the first international auction house when it expanded from London to New York (1955), the first to conduct sales in Hong Kong (1973), India (1992) and France (2001), and the first international fine art auction house in China (2012).

Sotheby’s went public with shares over-subscribed by 26 times in 1977 before going private in 1983 when it was acquired by Alfred Taubman. In 1988, Sotheby’s went public again and listed on the New York Stock Exchange.

In 2016, Taikang Life Insurance, one of China’s largest insurers, became Sotheby’s biggest shareholder after acquiring 13.5% of the auction house’s shares. The founder and Chairman of Taikang Life Insurance, Chen Dongsheng, is an influential figure in Chinese politics and his wife is the granddaughter of Mao Zedong. Sotheby’s second-biggest shareholder is Daniel Loeb’s Third Point hedge fund.

If the transaction is approved by Sotheby's shareholders, the world’s two largest auction houses would be privately owned by French billionaires. Since 1998, Christie’s has been owned by Groupe Artémis, the holding company of French businessman François-Henri Pinault.