Sotheby’s has gone under the hammer for $3.7bn, ending years of public ownership, with the venerable auction house sold to Patrick Drahi, the billionaire founder of telecoms group Altice. The deal concludes frantic negotiations that began with an unsolicited approach from Drahi.
The Franco-Israeli entrepreneur collects art and has been looking to raise his profile outside the telecoms industry where he has made his fortune, according to a person who worked on the sale. His purchase means the world’s two largest auction houses will be owned by French billionaires, with Sotheby’s rival Christie’s bought by the Pinault family’s holding company two decades ago.
The sale marks a high point in the art market, which has rebounded in spectacular fashion since the fallow years that followed the financial crisis. Sotheby’s and Christie’s have held a series of record-breaking auctions, capped by the $450m sale of a contested Leonardo da Vinci painting by Christie’s in 2017. Since then, blockbuster sales of works by David Hockney, Claude Monet and Jeff Koons, among others, have been held. Sotheby’s shareholders will receive $57 a share from BidFair, Mr Drahi’s holding company — a 61 per cent premium to the company’s most recent closing price but below an all-time high struck on the verge of the financial crisis in 2007.
Drahi is best known for his activity in the telecoms and media sector over the past two decades, where he has used debt-fuelled acquisitions to build Altice, a telecoms and media empire that expanded from its roots in France to the US, Portugal, Israel and the Dominican Republic. In January last year, Drahi announced that Altice would spin off its US business and restructure its European operations after poor results heightened concerns over the company’s ability to keep servicing its then €50bn debt pile. Since then Altice’s US arm has posted a solid performance, while the European business is languishing against a backdrop of a highly competitive environment in its largest market of France.
Drahi’s office said that the investment was being conducted on behalf of his family through a personal holding company “with a very long-term perspective”. Drahi added that he had “full confidence in Sotheby’s management, and hence do not anticipate any change to the company’s strategy.”
Sotheby’s generated $109m of net profit last year on revenues of $1.04bn; both figures were down on 2017, despite the value of works that it sold rising 16 per cent to $6.4bn. Domenico De Sole, chairman of Sotheby’s, said that the board “enthusiastically” supported Mr Drahi’s offer “which delivers a significant premium to market for our shareholders”.