The company's proxy filing tells us some details about how the Drahi deal came together.This commentary by Marion Maneker is available to AMMpro subscribers. (The first month of AMMpro is free and subscribers are welcome to sign up for the first month and cancel before they are billed.) Now we know a great deal more about how the Sotheby’s deal came together. But the more we know, the more it raises other interesting questions. According to Sotheby’s SEC filing late last week, we now know how the deal between Patrick Drahi and Sotheby’s came together, how the price was determined and what the likelihood is of a late play from another buyer or investor group might be. Beginning in November of 2018, Sotheby’s was in play as different groups of potential buyers coalesced and fell apart in pursuit of the firm. Two of the potential buyers were led by private equity firms (one having held conversations with past and current Sotheby’s employees) and the third originally began as what the private equity people call a “club deal.” That one ended up both winning the prize (for now) and being led by a sole acquirer but the levels of bank debt involved make it all but indistinguishable from a private equity deal. While we wait to see what happens, the narrative Sotheby’s provides in the proxy statement it filed leading up to a special meeting of shareholders to approve the current deal tells us, “From time to time in the preceding four years, the Company’s senior management has had discussions with parties about the possibility of investing in the Company.”
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