French telecom billionaire Patrick Drahi weighs taking Sotheby's public

French telecom billionaire Patrick Drahi is weighing an initial public offering of Sotheby’s, a little over two years after he bought the storied auction house, people with knowledge of the matter said. 

Drahi has held preliminary discussions with potential advisers about a US listing of Sotheby’s as soon as next year, the people said, asking not to be identified because the information is private. 

Sotheby’s, with a nearly 300-year history, is one of the world’s biggest auction houses dealing in fine art, collectibles and real estate. It’s seen strong online sales during the pandemic and has been moving into digital offerings including non-fungible tokens. The company competes with Christie’s, which is owned by French billionaire Francois Pinault. 

Drahi stunned the art world when he bought Sotheby’s for $3.7 billion including debt in 2019, a deal that ended its three-decade run as a public company. A listing would return one of the auction industry’s most storied names to the stock market and provide investors a key glimpse into the inner workings of the art world at a time when rising wealth is helping set new records. 

Talks are at an early stage, and details of the potential offering could change depending on investor appetite, the people said. A representative for Drahi and Sotheby’s didn’t immediately respond to a request for comment.

Drahi is a serial dealmaker who’s built a telecommunications empire across Europe and the US. The Moroccan-born Frenchman established himself by buying and selling small cable companies in France, before embarking on a debt-fuelled acquisition spree that turned his modest TV and phone group into one of the world’s biggest media and telecom companies. 

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On Tuesday, he raised his holding in BT Group Plc to 18 per cent to tighten his grip on the future of the UK telecoms giant. While Drahi said he won’t make a takeover offer for BT, his approach of creeping control could flush out other interest from private equity firms or rival operators. 

His decision to explore options for Sotheby’s comes in a strong year for the auction house. In November, it raised $1.3 billion through its so-called Marquee Sales, a series of prestige online and in-person auctions. A hotly-anticipated sale of artworks owned by real estate developer Harry Macklowe brought in $676 million alone.

Sotheby’s has been placing increasing importance on non-traditional sources of revenue. In April, it brokered a $1.8 million sale of rapper Kanye West’s Nike Air Yeezy 1 sneakers. It’s also embraced the market for non-fungible tokens, or NFTs, and partnered with online marketplace Nifty Gateway earlier this year on a $16.8 million sale of work by the digital artist known as Pak.

“Sotheby’s and auction houses have become tech platforms in a way,” said Franck Prazan, owner of the Applicat-Prazan gallery and a former managing director at Christie’s in France.