Art collectors and dealers in China reacted positively on Tuesday to news of French-Israeli telecoms billionaire Patrick Drahi's offer to buy auctioneer Sotheby's, which would see it become a privately held company for the first time in more than 30 years.
Chen Dongsheng, the Chinese businessman who owns the biggest single stake in Sotheby's through his Taikang Insurance company, has yet to comment on Drahi's US$3.7 billion deal to privatise the 275-year-old auction house.
"For me, the art business has always been a human business and flexibility is key to getting work done. I assume that Sotheby's should be more flexible when it becomes a private company," said Michael Xufu Huang, the 25-year-old co-founder of the M Woods museum in Beijing and an active art collector.
As for what kind of flexibility Chinese buyers are looking for, one dealer who requested anonymity because of the sensitivity of the subject said that the art market often operates in grey areas and a private company could accommodate clients' wishes more easily.
"For example, the volume and locations of transactions can now be kept secret. It should also be able to offer more flexible payment terms. Before, Sotheby's has been hemmed in by having to make its audited results, including its tax bill, public knowledge," he said.
Fang Fang, owner of Star Gallery in Beijing, said Sotheby's privatisation reflects the challenges faced by the art market in China as well as globally.
"The deal coincides with the fact that the secondary market is facing new pressure after 10 to 20 years of rapid growth. Prices have gone up so much that we have ended up with a frothy market. Auction houses have played a major role in pushing prices higher during that period. Now that the market is adjusting, it is better to be a private company and not have to disclose financial results on a regular basis," he said.
Last year, Sotheby's reported an adjusted profit of close to US$130 million. Its main Asia auctions in Hong Kong sold a record US$1 billion worth of art and other collectibles. But the share price had fallen by around 40 per cent in the past year before Drahi's offer was announced because of pessimism over the art market.
Art adviser Valerie Wang Conghui, who often participates in auctions on behalf of clients, said the sale should not affect the auction house's China business. Chen's privately held company bought a 13.5 per cent stake in Sotheby's on the open market in 2016, and it was assumed at the time that he did so to learn how to grow China Guardian, his own auction house and China's second biggest.
I assume that Sotheby's should be more flexible when it becomes a private companyMichael Xufu Huang
"There was never any synergy between the two in China, so Chen's exit will not really affect Sotheby's," Wang said.
Neither Sotheby's Asia nor China Guardian would comment on Drahi's offer. Earlier, Sotheby's said its board had agreed to the sale and that Drahi was confident in the auction house's management.
"This acquisition will provide Sotheby's with the opportunity to accelerate the successful programme of growth initiatives of the past several years in a more flexible private environment," Sotheby's CEO Tad Smith said in a prepared statement.
Drahi, 54, is the founder and controlling shareholder of Altice, which provides telecommunications services in France and elsewhere. He will pay US$57 per share, a 61 per cent premium to the Sotheby's closing stock price Friday, to acquire the auction house.
Sotheby's counterpart in London, Christies, founded by James Christie in 1766, was sold to another French businessman, Francois Pinault, in the late 1980s. It too was taken private.
Additional reporting by Associated Press, Agence France-Presse
Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.Artikel Asli