[ad_1]
There are rumors in foreign media that Sotheby’s owner may sell its minority stake Patrick Drahi Its telecommunications group Altice is under pressure from accumulated debt.
The telecom entrepreneur has asked investment banks such as Lazard and Morgan Stanley to explore asset sales, including the auction house. Among the possible “saviors” are several European billionaires, but also the Qatar Investment Authority, which had already held talks with Drahi a year ago about buying a stake in Sotheby’s through a potential capital increase, but nothing has actually happened. But perhaps now is a more favorable time, even if the French-Israeli billionaire has been reluctant to sell Sotheby’s, which he has owned since 2019 through the holding company BidFair USA.
War in the Gaza Strip
However, people close to Patrick Drahi, a prominent figure in Israel who owns a TV channel and a telecom operator, believe Hamas attacks on Israel could also complicate a sale to Qatar, which has been home to the Hamas politburo since 2012 and has provided hundreds of millions of dollars in aid to the Gaza Strip.
Drahi bought the auction house for $3.7 billion in 2019, paying $57 per Sotheby’s share, a 61% premium to the price of the handbags. At the time, the move surprised the market because Sotheby’s was the only publicly traded auction house on the New York Stock Exchange after 31 years.
Debt accumulation
Drahi built a multi-billion-dollar fortune in the media and telecommunications sectors using financial leverage, i.e. massive recourse to financial debt at a time when interest rates were very low: today, with interest rates soaring, he finds himself in a situation that is no longer sustainable. Years of acquisition sprees in France, the United States, Portugal and Israel, with accumulated debt costs totaling around $60 billion, call into question its business model. To make matters worse, Altice has been embroiled in a corruption scandal involving Drahi’s inner circle, the group’s business is in crisis and its largest operating unit, French telecom operator SFR, continues to lose mobile customers, with around 235,000 lost in the first 6 months of this year.
Against this backdrop, Drahi is racing to arrange asset sales before the critical moment arrives, with an expected sale of 20.1 billion euros by the end of 2027. In the next 12 months, Drahi hopes to reduce leverage to around 5 times profit, or around 4 billion euros, which means raising up to 3.5 billion euros through asset sales, including the “jewel” Sotheby’s auction house.
[ad_2]
Source link
