After over 30 years as a public company, Sotheby’s will return to private ownership in a £2.95bn deal.
The international auction house has signed a definitive merger agreement to be acquired by BidFair USA, an entity wholly owned by media and telecom entrepreneur, Patrick Drahi.
The deal will see the 275-year-old London-founded company become a private entity after 31 years trading on the New York Stock Exchange.
Under the terms of the agreement, which was approved by Sotheby’s board of directors, shareholders, including employee shareholders, will receive $57.00 (£45.31) in cash per share of the auction houses’ common stock in a transaction with an enterprise value of $3.7 billion (£2.95bn). 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.
Domenico De Sole, chairman of Sotheby’s board of Directors, shares: “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.”
“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,” adds Sotheby’s chief executive officer, Tad Smith. “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.”
Patrick Drahi, 55 years old, is a French-Israeli businessman with telecommunications, media and digital properties across the world. He is also an avid art collector.
The global entrepreneur owns a variety of companies. In 2015, he bought Cablevision, and rebranded that company, as well as internet service provider Optimum, as Altice USA. Sotheby’s chief executive officer Tad Smith was the former president of Cablevision.
“I am honored that the Board of Sotheby’s has decided to recommend my offer,” comments 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.