In less than a month, four shareholder lawsuits have been filed against Sotheby’s. At issue is the famed auction house’s acquisition deal with Patrick Drahi. The 55-year-old Drahi, known as a telecom mogul, is president of Altice, the French telecom group. In June, it was announced that he was planning to purchase Sotheby’s for $3.7 billion and turn it into a private company. Sotheby’s has been a publicly traded company for over three decades.
The lawsuits all name a number of Sotheby’s executives and board members as well as the company itself as defendants. They assert that the information provided in Sotheby’s proxy statement contained “materially incomplete and misleading” information on the deal, as the most recent suit states, “to convince Sotheby’s shareholders to vote in favor of the Proposed Transaction.” This would violate Securities and Exchange Commission (SEC) laws.
After the latest suit was filed, Sotheby’s made the same statement it made after the prior filings, saying, “the lawsuits filed were expected and routine. We do not expect the suits to have any impact on our targeted closing timing of the fourth quarter of this year.”
The telecom magnate, who is purchasing Sotheby’s through his company BidFair, is not widely known as an art connoisseur. However, he was described by one person in the art world as “a very secretive, elitist art collector.”
Going from a publicly held company to a private one is a significant change, of course. Shareholders are left in limbo until it’s determined what their shares will be worth. They have a right to question the legality of the transaction. Attorneys with experience in this area can provide valuable guidance.