Sotheby's sold to billionaire art collector Patrick Drahi for $3.7 billion
New York(CNN Business) Telecom billionaire and art collector Patrick Drahi has emerged as the winning bidder for Sotheby's, the 275-year-old auction house.
Sotheby's (BID) announced an agreement on Monday to be taken private by Drahi in a deal valued at $3.7 billion including debt.
The takeover will result in Sotheby's, the world's oldest and largest international auction house, ending its three decades as a public company, trading on the New York Stock Exchange.
The deal values Sotheby's at $57 per share, representing a 61% premium to the company's closing price on Friday. Sotheby's stock spiked 58% on Monday.
After the deal closes, Sotheby's will be owned by Drahi's BidFair USA. Drahi, a billionaire entrepreneur and art collector, has built a fortune that Forbes estimates at more than $9 billion.
"Sotheby's is one of the most elegant and aspirational brands in the world," Drahi said in a statement, adding that he is a longtime client and admirer of the company.
Sotheby's was founded in London in 1744 and today it has 80 offices around the world, with its headquarters in New York.
Drahi expressed "full confidence" in Sotheby's management and said he has no plans to change the company's strategy. He is the founder and a major shareholder in Altice USA (ATUS), a New York cable television provider that owns Optimum and recently acquired streaming news startup Cheddar for $200 million.
Sotheby's said that leaving Wall Street will give the company the flexibility to accelerate its recent restructuring program to position the company for long-term success.
"The time is right for Sotheby's to return to private ownership on a path of growth and success," Sotheby's Chairman Domenico De Sole said in a statement.
Drahi said he is making the acquisition for his family through his personal holdings and promised to keep a "very long-term perspective."
Christie's, Sotheby's rival auction house, went private in 1998 when it was acquired by French billionaire Francois Pinault.
Sotheby's share price climbed to a record high a year ago but has since tumbled because revenue has slumped. The stock was down 40% over the past year, prior to Monday's go-private deal.
For years Sotheby's has been under pressure to improve performance, especially from billionaire activist investor Daniel Loeb. Loeb's Third Point owned 14.3% of Sotheby's as of May 10, making it the company's second-largest shareholder. Loeb serves as a director on Sotheby's board of directors.
Sotheby's auctions famous paintings, sculptures and other valuable collectibles. In August, the firm is scheduled to auction a fully restored Aston Martin DB5 made famous by the 1964 James Bond film "Goldfinger." The vehicle is expected to sell for as much as $6 million.
The sale of Sotheby's, which must be approved by Sotheby's shareholders, is expected to close in the fourth quarter.
To fund the acquisition, Drahi said he secured financing from French bank BNP Paribas. He also plans to sell up to $400 million of his stake in Altice USA by the end of the year. The billionaire owns about 38% of the American company.
Drahi said he does not plan to sell any shares in Altice Europe, the Amsterdam-listed telecom and media giant.
