Sotheby’s owner Patrick Drahi is weighing a potential initial public offering (IPO) for the 277-year-old auction house, according to Bloomberg. The move, which could reportedly take place next year, would mark the auction house’s return to public trading less than three years after Drahi bought it for around $3.7bn and took it private.
News of the potential IPO comes just as Sotheby’s is closing out its biggest year of sales ever. This week the auction house reported passing $7.3bn in sales for 2021, with around 20 auctions still to close. The record take was fueled by a successful digital strategy honed at the onset of the Covid-19 pandemic in 2020 and refined further this year, an embrace of cryptocurrency and NFTs (non-fungible tokens), a thriving luxury and collectibles business, and an exceptional slate of major fine art consignments—foremost among them the collection of Linda and Harry Macklowe.
Drahi, a French-Israeli billionaire who has a reputation for cutting costs, has received significant dividends from Sotheby’s since his takeover. In May of this year, Sotheby’s moved to pay out a $300m dividend to its owners (Drahi’s company BidFair USA owns 94% of the auction house) following a $165m distribution just six months prior.
Even before the pandemic, Sotheby’s chief executive Charles Stewart—previously the co-president and chief financial officer at Drahi’s cable television company Altice USA—had overseen a restructuring of the auction house aimed at slashing costs, including around 20 to 30 senior executives laid off in autumn 2019.
Rumblings of Sotheby’s return to public trading came to light amid a number of other manoeuvres by Drahi, who recently borrowed heavily against a mortgage taken on Sotheby’s London headquarters on New Bond Street in a leaseback transaction. Those funds could be instrumental in his rumoured bid to take over British telecommunications giant BT.
Through his firm Altice, Drahi bought a 12.1% stake in BT this past June, making him the company’s biggest stakeholder. This week Altice revealed its stake has grown to 18%—news that sent BT shares tumbling. The British government has said it is monitoring the situation and will intervene if necessary—BT, a formerly state-owned company, is currently building out Britain’s high-speed internet infrastructure.
For more than three decades prior to Drahi’s purchase, Sotheby’s had been identified by the ticker name “BID” on the New York Stock Exchange, where it was the oldest company listed. The transparent financial reporting required of publicly listed companies had made the auction house a rare source of clarity in an otherwise opaque and obfuscatory art market.