Sotheby’s has enlisted Goldman Sachs and Morgan Stanley to advise on a potential public offering of the company, according to a report published by Bloomberg on Thursday. Owned by telecommunications mogul Patrick Drahi, the auction house could be taken public later this year. It may seek a valuation estimated around $5 billion.
When Drahi purchased Sotheby’s for $3.7 billion in June 2019, the deal took the 277-year-old auction house private. It had been a publicly traded company for three decades prior to that. The owner’s decision to consider an IPO follows a record $7.3 billion year for the auction house, which benefitted from the art market’s bullish post-pandemic recovery. Some $6 billion was generated through auctions, the house said; the remaining $1.3 billion came from private sales.
In the two years since he acquired the house, Drahi’s investment in Sotheby’s seems to have paid off. Drahi, who is known for leveraging debt in major investments, put $1.45 billion of equity toward the 2019 deal to buy the house and borrowed the remaining sum. After a pandemic-fueled period of cost cutting that followed his deal, Drahi went on to pay out $465 million in dividends to shareholders.
Calling the initial deal “opportunistic,” Chris Hughes wrote in the Washington Post that Drahi’s financial maneuvers could be fruitful. “A stake sale could free up capital to deploy elsewhere,” Hughes wrote.
Drahi also owns the U.S. telecommunications company Altice. He recently raised Altice’s stake in the British telecoms company BT from 12.1 percent to 18 percent in December, prompting speculation that he could be mulling a takeover bid of the company. Drahi has denied this.