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

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

Billionaire entrepreneur and art collector Patrick Drahi is taking auction house Sotheby's private in a deal valued at $3.7 billion.

Since he established the company in the Netherlands in 2001, Drahi has built it into a multinational, broadband, telecommunications, media, digital, and advertising company.

"This acquisition will provide Sotheby's with the opportunity to accelerate the successful programme of growth initiatives of the past several years in a more flexible private environment", he added.

By having been public, in many ways, Sotheby's operated at a competitive disadvantage to its main US rival, Christie's, which was already private, experts said.

The deal, which is expected to close in the fourth quarter of this year pending shareholder approval, would return Sotheby's to the private market after 31 years as a public company.

BidFair USA, an entity wholly owned by Drahi, will pay $57 per share for Sotheby's, which is a 61% premium to the company's closing stock price on Friday.

In 2012, it sold Edvard Munch's The Scream.

Track Sotheby's stock price here in real time.

A report published by Swiss bank UBS and Art Basel in March said that the global art market had enjoyed another uptick in 2018. The proposed deal provides a massive premium to recent prices, but is considerably more modest when compared with the levels Sotheby's traded at this time previous year.

The following year he made his dramatic entry into the USA market, snapping up cable company Suddenlink in a $9 billion deal in 2015, then Cablevision for $17.7 billion in 2016 and in April, the U.S. financial video news start-up Cheddar.

"Sotheby's is one of the most elegant and aspirational brands in the world". Drahi has also been selling non-core assets in recent years to ease concerns over the debt levels of his businesses.

The Israeli-French media tycoon is the founder, board president, and controlling shareholder of Altice Europe.

About five years ago Sotheby's ended a long-running fight with activist investor Daniel Loeb's hedge fund Third Point, by asking Loeb and two associates to join Sotheby's board, and Loeb was instrumental in hiring Smith as CEO. French online art sales database ArtPrice lists him as the 252nd biggest art collector worldwide.

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.

The boutique advisory firm LionTree is serving as financial advisor to Sotheby's on the deal, while BNP Paribas and Morgan Stanley are acting as financial advisors to BidFair USA.



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