After 31 years as a publicly traded company, auction house Sotheby’s (BID, Financial) announced on Monday it is being acquired and taken private by BidFair USA, a wholly owned entity of French media and telecom entrepreneur Patrick Drahi, in a $3.7 billion deal.
According to the terms of the all-cash agreement, shareholders of the New York-based broker of fine and decorative art, jewelry, real estate and collectibles will receive $57 per share. The offer is a 61% premium to the stock’s closing price on Friday.
In a statement, CEO Tad Smith expressed his excitement for the deal, praising Drahi’s track record of “innovation and ingenuity” in the telecom, media and digital space.
“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,” he said. “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.”
An art collector himself, Drahi said he is “honored” that his offer was accepted by the board of directors.
“Sotheby’s is one of the most elegant and aspirational brands in the world,” he added. “As a longtime client and lifetime admirer of the company, I am acquiring Sotheby’s together with my family.”
Following the announcement, shares soared 57% to $55.58 on Monday morning. GuruFocus estimates the stock has gained 40% year to date.
If approved by shareholders, the deal is expected to close in the fourth quarter.
With a 14.29% stake, Daniel Loeb (Trades, Portfolio) is Sotheby’s largest guru shareholder. Other gurus who are positioned to benefit from the deal include Chuck Royce (Trades, Portfolio), Jim Simons (Trades, Portfolio)’ Renaissance Technologies, John Rogers (Trades, Portfolio), Hotchkis & Wiley, Lee Ainslie (Trades, Portfolio) and Pioneer Investments (Trades, Portfolio).
Disclosure: No positions.
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