One of the world’s top auction houses is going private after over three decades on the New York Stock Exchange.
Sotheby’s announced Monday the company would be taken private by billionaire media entrepreneur Patrick Drahi, Fortune reported. The auction house sold to the Drahi-owned company BidFair USA for $3.7 billion.
“Sotheby’s is one of the most elegant and aspirational brands in the world,” Drahi said in a statement. “As a longtime client and lifetime admirer of the company, I am acquiring Sotheby’s together with my family.”
Shareholders will reportedly receive $57 in cash per share of common stock from the deal — a 61 percent premium some analysts have called surprisingly high.
“This premium implies nearly all-time highs for the stock,” said Alex Maroccia, an equity research analyst at Berenberg Capital Markets. “It’s a lot higher than where we had it valued because it’s not a very transparent business.”
As Fortune noted, Sotheby’s stock was down 40 percent over the past 12 months. Meanwhile, the company’s earnings have also seen a significant decline recently, with Sotheby’s citing a loss of $7.1 million in its 1st quarter earnings report this year.
According to Sotheby’s executives, the brand is optimistic about its return to the private market, where it will join competitor Christie’s.
“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,” said Sotheby’s CEO Tad Smith in a press release. “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.”
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