91% of Sotheby’s shareholders finally accepted Patrick Drahi’s offer of $57 per share (successful media entrepreneur – Numericable, SFR, Suddenlink, Cablevision which becomes Altice USA, L’Express, BFM, RMC… – and collector of Chagall, Vasarely and Soulages)
As in all the summer soap operas I like, there have been some twists and turns – and even if at these prices, 3.7 billion, I honestly have trouble realizing what this means – and a big suspense this summer with four mistrial actions brought before the New York courts against Sotheby’s and the counter-offer of Taikang Life Insurance Company which is already a shareholder but also Chinese.
I remind that Chen Dongsheng, the owner of Taikang, also a collector, owns the second largest auction house in China.
Because of its geopolitical nature, the art world is still at the heart of major international economic issues, as if nothing had happened.
I had already mentioned this sale with Mr. Drahi’s position last June in a previous article.
Such a purchase opens the doors of new owner to the rich collectors of the world, ultra rich and HNWI. Those who have the keys to our contemporary world.
It’s an incredible leap for this entrepreneur who succeeds by surprising each time.
Everything fits into the next sales season which will take place in November 👌 in New York just after the effervescent context of Frieze, Fiac, and other fairs including China;)
For the continuation of the strategy of the Sotheby’s house it will be necessary to wait, I think, until spring 2020 that all the legal issues are settled around this purchase to move forward.
I can guess, by looking at Mr. Drahi’s history, some predictions:
He systematically uses LBOs via a holding company that uses loans (the low central bank rates since the 2008 crisis have been favourable to it), in addition to social plans and voluntary departures.
I can therefore easily predict a cost reduction of at least 30% and a four or fivefold increase in profitability with the development of digital technology (Mr Drahi is one of the first French people to believe in it in telecommunications since the 1980s).
But the art market is not a mass consumer market with a demand that creates an offer. The actors are more versatile, very demanding and some customers even have the power to influence a sale according to their personal planning.
Over the past fifteen years or so, I have observed the financialization of the art market, often for necessary structural reasons, which has led many works of art to become real investments today. There are now sure values in the long term.
What I hope with this sale is that the active professionalisation that will follow is one of the strengths but also one of the weaknesses of large Houses – big companies ^^ – sales houses, open the middle market – difficult to capture and to sell – with more links with the gallery world.
Having professional managers, (necessary) investors and cost killers is one thing, but in art we need, in my opinion, people who live art on a daily basis and who attach as much importance to a catalogue raisonné,” as to a work considered A or A+ or B+
On another level, in the galleries, when I see almost all the trainees every day to deal with social networks, I am worried. We need people with more experience, certainly with a double experience, digital and on the art market.
The world has changed, it is a reality and not an obstacle to me and in my opinion, yes, we must now devote a real budget to these positions to propel an arty company in the coming years
To be continued….
To finish this review, I also remember that the Patrick and Lina Drahi Foundation has been spending millions on education and schools for years. There is never but one side to a personality 👌
Wishing You a nice week-end !