Sold to the highest bidder! Yesterday Sotheby’s shareholders approved the astonishing $3.7 billion (£3 billion) sale of the auction house to Patrick Drahi, the billionaire telecoms executive and art collector.
“This is an historic moment for Sotheby’s and we are very pleased to have the validation of the company’s shareholders,” commented Tad Smith, Sotheby’s chief executive.
Drahi’s company, BidFair USA, received the overwhelming support of 91 percent of Sotheby’s shareholders. The voting took place this week at a special meeting held in New York. A spokesperson for Sotheby’s stated that the deal remains on track to close between October 2019 and the end of the year, subject to customary conditions.
The historic purchase will see the auction house officially return to private ownership after 31 years of public trading. Drahi’s net worth, as reported by Forbes, is valued at $9.1 billion (£7.4 billion), yet the French-Israeli billionaire will finance almost half of the deal with debt.
Following the initial announcement in June, renowned art dealer Larry Gagosian noted that “it’s certainly a vote of confidence for the art market. They are clearly banking on art prices continuing to rise.”
As a privately trading company, Sotheby’s would be able to take greater financial risks and cut more prestigious backroom deals.
“There was always this sense that it was an uneven playing field because Christie’s is a private company and therefore able to manoeuvre in a slightly different way. That was the complaint we heard in the marketplace,” revealed Abigail Asher, a prominent art consultant based in New York.
Drahi also agreed to give shareholders $57 (£46) in cash per share of Sotheby’s common stock. This price was a staggering 61 percent premium compared to the share price before the deal was first announced.
According to the auction house’s chairman Domenico De Sole, Drahi’s offer “delivers a significant premium to market for our shareholders, including our employee shareholders, and positions Sotheby’s well for the future.”
But since June, several shareholders have expressed their dissatisfaction. The 275-year-old auction house was hit by four lawsuits from those attempting to stop Drahi’s purchase. Sotheby’s nevertheless described the lawsuits as “expected and routine.”
Tad Smith seemed delighted by the results of the shareholder vote and said, “Sotheby’s is on track for another strong season with outstanding auctions set to be held in Hong Kong and contemporary art sales that will inaugurate our newly-renovated space on Bond Street in London early next month.”