Sotheby’s has engaged Goldman Sachs and Morgan Stanley to advise them on a potential public offering by the company, according to a report by Bloomberg Thursday. Owned by telecommunications mogul Patrick Drahi, the auction house could go public later this year. It can command an estimated valuation of around $5 billion.
When Drahi bought Sotheby’s for $3.7 billion in June 2019, the deal stripped the 277-year-old auction house. It had been a publicly traded company for three decades before that. The owner’s decision to consider an IPO follows a record $7.3 billion year for the auction house, which has benefited from the post-pandemic art market bullish recovery. Some $6 billion was generated from the auctions, the house said; the remaining $1.3 billion came from private sales.
In the two years since acquiring the house, Drahi’s investment in Sotheby’s appears to have paid off. Drahi, who is known for leveraging debt in major investments, put $1.45 billion of equity into the 2019 deal to buy the house and borrowed the rest. After a pandemic-fueled period of cost-cutting that followed his deal, Drahi continued to pay out $465 million in dividends to shareholders.
Calling the initial agreement “opportunistic”, wrote Chris Hughes in the washington post that Drahi’s financial maneuvers might be fruitful. “A stake sale could free up capital to deploy elsewhere,” Hughes wrote.
Drahi also owns the American telecommunications company Altice. He recently increased Altice’s stake in British telecommunications company BT from 12.1% to 18% in December, suggesting he may consider a takeover bid for the company. Drahi denied this.