Sotheby’s announced on Monday an agreement to be acquired by French billionaire Patrick Drahi. If the transaction is approved by shareholders, the auction house would return to private ownership after 31 years as a public company. It would also mean that the world’s two largest auction houses, Christie’s and Sotheby’s, will be under the control of French billionaires.
Sotheby’s goes private again after 31 years as a public company
The definitive merger agreement was made between Sotheby’s and BidFair USA, an entity wholly owned by media and telecom entrepreneur as well as art collector, Patrick Drahi. 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 $3.7 billion. Sotheby’s shares jumped 58.6% to US$56.13 after the deal was announced.
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 sharesholders, 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.