The arena for many transactions, the auction house is the target of a purchase itself, and leaves the New York stock market to enter into private hands.

Global auction house Sotheby's, whose art sales can shed light on the spending habits of high net worth individuals, is being taken off the listed market and made a private business like its rival Christie’s. 

French billionaire Patrick Drahi is buying Sotheby’s for $2.7 billion. Billionaire Drahi, who has built a telecoms business empire, is paying $57 a share in cash for the firm, which is listed in New York. The purchase price is a 61 per cent premium to where the auction house’s shares closed on Friday last week.

Sotheby’s said it has “signed a definitive merger agreement” to be acquired by BidFair USA, an entity wholly owned by Drahi. 

The organisation has been listed on the market for 31 years. 

“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,” Tad Smith, Sotheby’s chief executive, said. 

Drahi is founder, president and controlling shareholder of Altice Europe and chairman and controlling shareholder of Altice USA. Aged 55, Drahi founded Altice in 2001 in Europe, and over the course of nearly 20 years, he has built and acquired telecommunications systems across the world, turning Altice into a multinational broadband, telecommunications, media, digital and advertising company.

The closing of the deal is subject to customary conditions, including regulatory clearance and shareholder approvals, but is not subject to the availability of financing, Sotheby’s said. The transaction is expected to close in the fourth quarter of 2019 following shareholder approval.

LionTree Advisors is Sotheby’s financial advisor in connection with the transaction, and Sullivan & Cromwell LLP is the company’s legal counsel. BNP Paribas and Morgan Stanley are acting as financial advisors to BidFair, BNP Paribas acted as sole financing provider, and Hughes Hubbard & Reed LLP and Ropes & Gray International LLP are serving as its legal advisors.

Organisations such as Sotheby’s witness trends in fine art transactions often involving high net worth individuals, a market that at times has been buoyed by rising affluence in emerging market countries as well as traditional sectors. (See this recent report by UBS and Art Basel about market trends.)

The auction market remains fiercely competitive and digital, with online platforms providing a disruptive force to the sector.

In early May, Citi Private Bank said that it was partnering with Sotheby’s, focusing more attention on how the bank works with art investors and collectors as part of its value offering.