Just this week, it was reported that Christie’s and Sotheby’s are attempting to settle their civil antitrust and shareholder cases to the tune of $582 million.
Its former chairman Alfred Taubman will pay most of Sotheby’s tab, according to the company’s statements.
Taubman recently had his son Robert Taubman replace him as chairman, over the objection of Ronald Baron, who heads up a mutual fund which is the largest Sotheby’s stockholder. Baron had wanted the firm to distance itself from Taubman’s reported actions in the antitrust matter in order to get the stock price moving in the right direction again. As reported in past newsletters, Baron was able to get four allies appointed to Sotheby's board, but he was still out-voted by Taubman board members.
In an interview with the Wall Street Journal, Baron also said he had been told that Alfred Taubman blocked a takeover bid by LVMH Moet Hennesy Louis Vuitton -- at about 2 1/2 times the share price. The bid was reportedly made last September, before the scandals erupted and the stock price fell.
Plaintives in the civil antitrust suit will get $256 million from Sotheby’s and an equal amount from Christie’s. Taubman will pay $156 million for his part of the Sotheby’s bill, and the company will shell out an additional $50 million in cash and $50 million in discount coupons to plaintiffs.
Sotheby’s will attempt to close on the shareholder action by paying the plaintiffs $30 million, which will be repaid by Taubman and an additional $40 million in Sotheby’s class A common stock, which is actually up over 24. That’s 10 points from its bottom when the scandal hit this past spring.
According to the Wall Street Journal, there is a serious possibility that Taubman may sell some or all of his 13.2 million shares of the company to pay for his share of the settlements. But a spokesman for Taubman called the report "an interesting extrapolation of a statement that really, he is just looking at his options."
Several sources now report that a number of financial analysts feel Sotheby’s is now a possible take-over target due to the situation.
Sotheby’s also said it was in “serious negotiations” with the U.S. Justice Department. Michael Sovern, chairman of the holding company, noted optimistically, “With a Justice Department resolution in prospect, the company can move forward with its business under the strong leadership of its current management team.”
Meanwhile in a statement of equal optimism, Christie's International Plc Chief Executive Edward Dolman said: "Our company is in the strongest shape it has ever been...The settlement will have no impact on our operations." He also noted that Christie's had cooperated fully with the U.S. authorities in their investigations.
Unfortunately for both, international auction clients have also filed a multimillion-dollar lawsuit seeking class-action status against Christie's and Sotheby's auction houses. The new suit, which uses a strategy in which plaintiffs from countries without class-action litigation instead file claims in U.S. courts, makes the same allegations of price-fixing as the cases being settled.
And more bad news for Sotheby’s, Standard & Poor’s ratings remain on CreditWatch with negative implications, pending resolution of the antitrust litigation by the Justice Dept.
Novak has over 48 years experience in the photography-collecting arena. He is a long-time member and formally board member of the Daguerreian Society, and, when it was still functioning, he was a member of the American Photographic Historical Society (APHS). He organized the 2016 19th-century Photography Show and Conference for the Daguerreian Society. He is also a long-time member of the Association of International Photography Art Dealers, or AIPAD. Novak has been a member of the board of the nonprofit Photo Review, which publishes both the Photo Review and the Photograph Collector, and is currently on the Photo Review's advisory board. He was a founding member of the Getty Museum Photography Council. He is author of French 19th-Century Master Photographers: Life into Art.
Novak has had photography articles and columns published in several newspapers, the American Photographic Historical Society newsletter, the Photograph Collector and the Daguerreian Society newsletter. He writes and publishes the E-Photo Newsletter, the largest circulation newsletter in the field. Novak is also president and owner of Contemporary Works/Vintage Works, a private photography dealer, which sells by appointment and has sold at exhibit shows, such as AIPAD New York and Miami, Art Chicago, Classic Photography LA, Photo LA, Paris Photo, The 19th-century Photography Show, Art Miami, etc.
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