Abu Dhabi Fund ADQ to Buy Sizeable Stake in Sotheby’s
Sotheby's Maison at Landmark Chater, which opened in Hong Kong on 27 July 2024. Photo: Stefan Ruiz.
Abu Dhabi investment fund ADQ announced that it will acquire a minority stake in leading auction house Sotheby’s by the end of the year.
ADQ will reportedly furnish the majority of a U.S. $1 billion injection into the company, with the rest coming from Patrick Drahi, the French-Israeli telecoms magnate who purchased Sotheby’s for U.S. $3.7 billion in 2019.
Hamad Al Hammadi, Deputy Group Chief Executive Officer of ADQ, said ‘our investment underscores our firm belief in the enduring value of Sotheby’s brand, market leading platform, and the ability of its management to execute on their growth agenda.’
ADQ was established under the name Abu Dhabi Developmental Holding Company PJSC in 2018. It’s a sovereign wealth fund with an estimated $249 billion in holdings across industries including energy, agriculture, healthcare, and logistics.
Sotheby’s CEO Charles F. Stewart said ‘the additional capital and investment expertise will enable us to accelerate our strategic initiatives, expand our commitment to excellence in the art and luxury markets, and continue to innovate to better serve our clients around the world.’
In a statement, ADQ said the investment would also go towards reducing leverage at Sotheby’s.
In June, S&P Global Ratings dropped Sotheby’s credit rating from B to B minus—which The Wall Street Journal described as ‘deep junk territory’—citing ‘pressured profitability and continued EBITDA decline’. EBITDA is a company’s earnings before interest, taxes, depreciation, and amortisation.
Leverage is also a major concern right now for Drahi, as the communications company he founded, Altice, struggles with some $60 billion of debt.
Drahi is estimated to have sold around £980m ($1.2 billion) worth of shares in British Telecommunications company BT Group since February, reportedly to cover margin loans.
Sotheby’s is likewise seeking to bounce back after reportedly laying off close to 50 employees in London this summer with additional job cuts in Europe and New York. —[O]
Main image: Sotheby's Maison at Landmark Chater, which opened in Hong Kong on 27 July 2024. Photo: Stefan Ruiz.
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