French telecoms and media mogul Patrick Drahi is acquiring Sotheby's auction house, one of the world's biggest art brokers, in a $3.7 billion deal, the British-founded company announced Monday.
Drahi, the billionaire founder of the Altice empire which owns SFR telecoms company and several French media houses including BFM news channel and Liberation newspaper, is paying $57 per share to acquire Sotheby's through his company BidFair USA, the art house said.
His foray into the art market sees him follow in the footsteps of fellow French billionaire, Kering chairman Francois Pinault, who acquired a majority stake in Sotheby's rival Christie's in 1998.
The deal returns British-founded Sotheby's to private ownership after 31 years as a publicly traded company on the New York Stock Exchange.
Its shares soared 58 percent in afternoon trading in New York on news of the offer, which represents a 61 percent increase over Sotheby's closing price on Friday.
"Known for his commitment to innovation and ingenuity, Patrick founded and leads some of the most successful telecommunications, media and digital companies in the world," Tad Smith, Sotheby's CEO, said in the statement.
"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.
Drahi, France's ninth richest individual with an estimated net worth of $9.1 billion according to Forbes magazine, said that he was "honoured" that Sotheby's board had recommended to shareholders that they accept his offer.
"Sotheby’s is one of the most elegant and aspirational brands in the world. As a longtime client and lifetime admirer of the company, I am acquiring Sotheby's together with my family," he said.
The deal, which is subject to regulatory and shareholder approval, is expected to be finalised in the fourth quarter of 2019 and comes as prices fetched by artworks at auction soar.
Last month Sotheby's sold a Monet painting from the Impressionist's celebrated "Meules" (Haystacks) series for $110.7 million, an auction record for the artist.
Drahi said his investment was aimed at the "very long term" and that he had no plans to change Sotheby's business strategy.
"It's a company he's been eyeing for several years," a source close to the businessman told AFP.
A source in Drahi's entourage said he had "encyclopaedic knowledge of classical music and paintings particularly."
The CEO of French online art sales database ArtPrice described him as a "secretive" art collector who had in his possession some "fairly spectacular" works by Belarussian-French artist Marc Chagall.
- Rapid expansion -
The self-made Drahi was born in Morocco and moved to France at 15. He is a French citizen, but also holds Israeli and Portuguese citizenship.
Drahi started his career at Philips and then moved to a subsidiary of cable giant Liberty Global before striking out on his own as a telecoms entrepreneur.
After buying up several troubled cable and mobile operators he entered the big league in 2014 when he fought off rival Bouygues to buy France's second-biggest mobile phone operator SFR.
Taking advantage of low interest rates, he stormed the US market the following year, acquiring a 70 percent stake in cable company Suddenlink in a $9 billion deal, and then snapping up Cablevision for $17.7 billion in 2016.
Through the Netherlands-based Altice he also owns 75 percent of Numericable, France's largest cable operator, as well as Portugal Telecom.
By 2017, his acquisitions had saddled Altice with around 50 billion euros in accumulated debt, sending its share price into freefall.
Promising to slow his expansion drive, Drahi returned that year as chairman of Altice's board to try to turn the group around.
On Monday, he vowed that Altice would remain his priority.