Sotheby’s bought by French billionaire
Sotheby’s is one of the world’s largest brokers of art, jewellery, real estate and other collectibles, and this week it was purchased outright by French businessman Patrick Drahi who is taking it back into private hands.
Mr Drahi, who has spent US$3.7bn purchasing Sotheby’s, made his fortune as the founder of telecoms group Altice and paid a huge 61% premium on the auction house’s shares. Whilst he stated the investment was “for my family”, Mr Drahi is also an art connoisseur himself with a collection including works by Pablo Picasso and Henri Matisse.
Sotheby’s itself is one of the most famous auction houses in the world – along with rival Christies – and has made some world-famous sales including Amedeo Modigliani’s ‘Nu couché’, Claude Monet’s ‘Meules’, the personal art collection of Andy Warhol and Edvard Munch’s ‘The Scream’.
However, despite this remarkable pedigree, many in the art world are shocked by how much Mr Drahi paid.
One prominent London art dealer told the Financial Times: “I think he’s bonkers to pay that price. Sotheby’s shareholders will be jumping up and down for joy.”
Another billionaire art collector agreed, saying: “Sotheby’s is a superb brand, which never makes money.”
By way of comparison, Christies sold to another billionaire family for just US$1.2bn in the late 1990s. The comparatively high price paid for Sotheby’s is surprising, but an embrace of new technologies such as online auctions might show the path to greater profits and help explain why Mr Drahi was happy to pay over the odds.
Tad Smith, president and chief executive of Sotheby’s, said: “Private ownership at this moment in Sotheby’s development would empower us to accelerate many of these growth initiatives and focus on long-term success.”
Evan Beard, head of art services for Bank of America Private Bank, agreed, saying: “Now that each auction house is on a level playing field and has the same stakeholder base — their ownership structures are very similar — rather than go into a race-to-the-bottom death-match for market share, you’ll see them look for ways to grow market share competitively rather than just giving away margin.”
With a string of high profile, and high value, pieces brought to auction in recent years it is clear that the market is recovering, and confidence has returned among high-end investors and collectors. With that in mind, it is possible that Mr Drahi has bought at exactly the right time and this deal will not look quite so overpriced with the benefit of hindsight.
