Sotheby's, one of the world's oldest auction houses, has been purchased by telecom billionaire Patrick Drahi.
The entrepreneur and art collector won the bid to purchase the company through a $3.7 billion offer. The 275-year old auction house announced on Monday that it has agreed to be taken off the New York Stock Exchange once the deal is made.
Drahi's bid for the company represents a 61 percent premium of the company market value as of Friday last week. The deal itself is estimated to be valued at $3.7 billion including Sotheby's outstanding debts. Following the announcement of the winning bid, Sotheby's stocks climbed by as much as 58 percent on Monday.
The takeover will officially end Sotheby's three-decade stint as a publicly traded company on the New York Stock Exchange.
Sotheby's stock prices had reached a record high last year, but have since dropped due to decreased revenues. The company's stock was actually down by around 40 percent over the last 12 months prior to the takeover announcement.
The company has been under a lot of pressure from its shareholders to improve its bottom line. Chief among those that put pressure on the company was billionaire investor Daniel Loeb, who owns 14.3 percent of the company through his company Third Point.
Once the deal is finalized, Sotheby's will be placed under Drahi's Bid Fair USA Company.
The French-Israeli businessman stated in an interview following the winning bid that he was actually a long-time client of Sotheby's and he had admired the company for quite some time now. The founder of the Netherlands-based telecom group Altice also stated that he does not plan to change anything within the company and that he has full confidence in its current management.
The auction house, which was originally founded in London in 1744, mentioned in a statement that it was happy with the deal it made with Drahi. The company's chairman Domenico De Sole stated that going private will likely give it more opportunities to grow and be successful.
Sotheby's is famous for auctioning one-of-a-kind collectibles such as famous paintings, sculptures, memorabilia, jewelry, and other items. The company is scheduled to hold another auction this August, where it will be auctioning a fully restored Aston Martin DB5. The vehicle is the same make and model that was used in the James Bond film "Goldfinger" in 1964. The car is expected to sell somewhere north of $6 million.
The takeover of Sotheby's is expected to become official sometime in the fourth quarter of this year. To fund the purchase, Drahi had partnered with French bank BNP Paribas. Drahi is also reportedly planning to sell some of his Altice USA shares to fund the acquisition, which he says he made for his family.