Billionaire Patrick Drahi agrees to buy Sotheby's in $5 billion deal

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Patrick Drahi, the billionaire behind telecoms and media group Altice, has agreed to buy art auction house Sotheby's in a deal worth US$3.7 billion on an enterprise value basis.
French billionaire Patrick Drahi, who is the chief executive of telco Altice, acquires Sotheby's auction house in US$3.7 billion deal. PHOTO: AFP

PARIS (REUTERS) - Patrick Drahi, the billionaire behind telecoms and media group Altice, agreed on Monday (June 17) to buy historic art auction house Sotheby's in a deal worth US$3.7 billion (S$5.07 billion) on an enterprise value basis.

Sotheby's said it had signed a definitive agreement to be acquired by BidFair USA, an acquisition vehicle set up by Drahi, which had offered US$57 in cash per share to buy out Sotheby's.

The offer represented a premium of 61 per cent to Sotheby's closing price on Friday. It will also result in Sotheby's returning to private ownership after 31 years as a public company whose shares were traded on the New York market.

The acquisition will also allow avid art collector Drahi to join rival French billionaire Francois Pinault at the top of the art world, with Pinault's financial holding company Artemis owning a majority stake in Sotheby's rival Christie's.

"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," Sotheby's chief executive Tad Smith said in a statement.

"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," he added.

Drahi said on Monday that he would remain focused on his main telecoms and media businesses and would not sell any shares in his Altice Europe NV business to fund his acquisition of Sotheby's auction house.

"As the future owner, I have full confidence in Sotheby's management, and hence do not anticipate any change to the company's strategy. Management and their exceptional teams and talent around the world will continue to operate with my full support," said a statement issued by Drahi's office.

"This investment will further demonstrate the anchoring of my family in the United States, a country where we have been very welcome since the successful acquisitions of Suddenlink in 2015, Cablevision in 2016 and just recently Cheddar," he added.

Sotheby's about five years ago ended a long-running fight with activist investor Daniel Loeb's hedge fund Third Point, by asking Loeb and two associates to join the Sotheby's board, and Loeb was instrumental in hiring Smith as chief executive.

Loeb, a prominent art collector, on Monday praised the sale.

The price "affirms the value we saw when we first invested in Sotheby's, and rewards long-term investors like Third Point who believed in its potential," Loeb told Reuters.

BNP Paribas and Morgan Stanley advised Drahi's Bidfair vehicle on the deal, while LionTree Advisors worked on behalf of Sotheby's.

Sotheby's was founded in London in 1744, and expanded overseas in the 20th century, moving to New York in 1955, Asia and France in 2001.

Famous items sold by Sotheby's include the collections of the late Duchess of Windsor, the personal collection of artist Andy Warhol and Edvard Munch's painting "The Scream" in 2012.

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