Abu Dhabi’s sovereign wealth fund, ADQ, has struck a deal with Sotheby’s owner, the French-Israeli telecoms tycoon Patrick Drahi, for a minority stake in the auction house. The transaction is expected to close before the end of the year.
Under the agreement, ADQ will acquire newly issued shares of Sotheby’s to “reduce leverage and support the company’s growth and innovation plans”, according to a release. Drahi, who will remain the majority shareholder, will also invest additional capital into Sotheby’s as a part of the deal. The total planned investment of both ADQ and Drahi amounts to $1bn, most of which comes from ADQ, a Sotheby’s spokesperson confirms. They decline to comment on Sotheby’s total valuation.
The news of ADQ’s investment is unlikely to come as a surprise to industry professionals. Reports of Drahi floating a private sale or a public offering of Sotheby’s shares have been circulating since 2021. Last year the Financial Times reported that another Gulf sovereign wealth fund, the Qatar Investment Authority, was among the candidates engaged in informal talks to acquire a minority stake in the auction house.
The pressure that high interest rates have placed on Drahi’s heavily leveraged business empire, which was built on sizeable loans and convoluted financing mechanisms in the era of cheap money, is well documented. Altice, the telecoms multinational that he founded and remains the controlling shareholder of, is straining under a reported $60bn of debt.
Sotheby's chief executive, Charles Stewart, said in a statement: "We are delighted to welcome ADQ as a shareholder to Sotheby’s. We embrace their long-term vision of our business, and this investment is a testament to what we have achieved so far as well as our significant potential for future growth. The additional capital and investment expertise will enable us to accelerate our strategic initiatives, expand our commitment to excellence in the art and luxury markets and continue to innovate to better serve our clients around the world."