PARIS/BOSTON--Franco-Israeli cable magnate Patrick Drahi made a surprise move into the art world by snapping up Sotheby's in a deal worth $3.7 billion, marking the art auction house's return to private ownership after 31 years.
The acquisition allows Drahi to join French billionaire Francois Pinault - who owns Sotheby's main rival Christie's - at the top of the art world and New York society. Drahi joins an exclusive club of French billionaires active in the global art market, which also includes LVMH's boss Bernard Arnault through his Louis Vuitton foundation.
Drahi's expansion in the United States also has echoes of former Vivendi boss Jean-Marie Messier, who turned a struggling French water company into a global media giant with stakes in established U.S. institutions.
The deal also marks a new chapter for the 275-year-old auction house that became a destination for a new generation of wealth created on Wall Street, in Silicon Valley and around the world. In many ways, being public put Sotheby's at a competitive disadvantage to its main U.S. rival Christie's, which was already private, art experts said.
"Now the company can become more flexible and nimble as a privately-held enterprise and it will be interesting to see the changes that will be made," said Abigail Asher, a partner at international art consultants Guggenheim, Asher.
Founded in London in 1744 before expanding overseas in the 20th century, Sotheby's had the distinction of being the oldest company listed on the New York Stock Exchange. 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".
Sotheby's said BidFair USA, an acquisition vehicle set up by Drahi, had offered $57 in cash per share to buy it out. The offer represented a premium of 61% to Sotheby's closing price on Friday, and gives it a market capitalisation of $2.6 billion.
The art world has been a favourite in recent times for investors looking to make extra returns in a world of ultra-low interest rates, with the prices of many expensive works of art having steadily increased. A report published by Swiss bank UBS and Art Basel in March said that the global art market had enjoyed another uptick in 2018.
