Altice N.V. founder and chairman Patrick Drahi entered the world of big-time art auctions Monday, agreeing to buy Sotheby’s in a deal valued at $3.7 billion that will ultimately take the venerable auction house private.
Drahi is best known in the cable industry as the man who shelled out $9.1 billion for Suddenlink Communications in 2015 and one year later gave the Dolan family $17.7 billion in cash for Cablevision Systems, creating Altice USA. Once a unit of European telecom giant Altice N.V., Altice USA split from the parent last year. Drahi remains chairman and controlling shareholder of Altice USA and president of the board and controlling shareholder of Altice Europe.
In a press release, Drahi said the funds for the Sotheby’s purchase are not linked to Altice USA, or Altice Europe.
Drahi’s BidFair USA agreed to pay Sotheby’s shareholders $57 each for their stock, a 61% premium to its closing price on June 14. According to reports, most of the purchase price ($2.66 billion) is in cash.
Drahi, a long-time collector and philanthropist, is expected to give the currently publicly traded Sotheby’s more flexibility after he takes the company private. In a business that is largely seasonal, that should come as welcome news.
“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 CEO Tad Smith said in a press release. “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.”
[full disclosure: Tad Smith was once CEO of Reed Business Information, a former parent of Multichannel News]
LionTree Advisors is serving as financial advisor to Sotheby’s in connection with the transaction, and Sullivan & Cromwell LLP is serving as the company’s legal counsel. BNP Paribas and Morgan Stanley are acting as financial advisors to BidFair, BNP Paribas acted as sole financing provider, and Hughes Hubbard & Reed LLP and Ropes & Gray International LLP are serving as its legal advisors.
Drahi’s personal collection tends to gravitate more toward Modern and Impressionist works, according to the New York Times, and the pieces he buys usually sell for $5 million or less, a far cry from some of Sotheby’s more famous auctions. Last year Sotheby’s sold a work by Jean-Michel Basquiat for $110.5 million and in May sold a Monet for $110.7 million.
“I am very honored that the Board of Sotheby’s has decided to recommend my offer,” Drahi said in a separate press release. “With my family, we are very enthusiastic to build together with its current management and their teams the future of Sotheby’s, a fascinating and multi-secular company with such a celebrated history of uniting people all over the world through culture and arts.
“For my entire life, I have been passionate about this industry and I believe the opportunities and growth potential are significant for Sotheby’s,” he continued. “I am making this investment for my family, through my personal holding, with a very long-term perspective. There is no capital link with Altice Europe or Altice USA. 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. This investment will further demonstrate the anchoring of my family in the United States, a country where we have been very welcomed since the successful acquisitions of Suddenlink in 2015, Cablevision in 2016 and just recently Cheddar.”
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