After seeing its share price collapse over 40% in the past few months, 275-year-old Sotheby's has been scooped up by French-Israeli businessman Patrick Drahi for $3.7 billion.
Founded in 1744, the auctioneer has long been a signal of imminent economic demise, so the telecom titan's buyout could well be catching a falling knife into recession, but for now, the avid art collector is excited:
“Sotheby’s is one of the most elegant and aspirational brands in the world,” Drahi said in the statement.
“As a longtime client and lifetime admirer of the company, I am acquiring Sotheby’s together with my family.”
Bloomberg reports the details. Investors will receive $57 in cash per share of Sotheby’s common stock under terms of the agreement, according to a statement Monday from the New York-based company. The offer price represents a 61% premium to Sotheby’s closing price on Friday.
The transaction means Sotheby’s is returning to private ownership after 31 years as a public company.
Drahi, 55 - worth $8.6 billion, according to the Bloomberg Billionaires Index - is the president of Altice Europe, a publicly traded telecommunications business with more than 30 million customers.
Full PR Statement:
Sotheby's today announced that it has signed a definitive merger agreement to be acquired by BidFair USA, an entity wholly owned by media and telecom entrepreneur as well as art collector, Patrick Drahi. Under the terms of the agreement, which was approved by Sotheby's Board of Directors, shareholders, including employee shareholders, will receive $57.00 in cash per share of Sotheby's common stock in a transaction with an enterprise value of $3.7 billion. The offer price represents a premium of 61% to Sotheby's closing price on June 14, 2019, and a 56.3% premium to the company's 30 trading-day volume weighted average share price. The transaction would result in Sotheby's returning to private ownership after 31 years as a public company traded on the New York Stock Exchange.
Tad Smith, Sotheby's CEO, said, "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. Known for his commitment to innovation and ingenuity, Patrick founded and leads some of the most successful telecommunications, media and digital companies in the world. He has a long-term view and shares our brand vision for great client service and employing innovation to enhance the value of the company for clients and employees. 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, 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."
"I am honored that the Board of Sotheby's has decided to recommend my offer," commented Patrick Drahi. "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."
The closing of the deal is subject to customary conditions, including regulatory clearance and shareholder approvals, but is not subject to the availability of financing. The transaction is expected to close in the fourth quarter of 2019 following shareholder approval.