Sotheby's offer oversubscribed

SOTHEBY'S latest offering to the public - 10 million common shares - was snapped up by institutional bidders yesterday, despite a dormant market for the art auctioneer's usual wares.

Although the dollars 125m ( pounds 66.8m) offering almost doubled the number of Sotheby's shares available to the public, Sotheby's share price in fact rose on the New York Stock Exchange after the sale, as some of the buyers decided to resell in the after market. The shares were trading at dollars 12.75 at midday yesterday, 25 cents above the dollars 12.50 offering price.

The issue, which leaves chairman Alfred Taubman with a controlling stake in the 250- year-old auction house, was over-subscribed, forcing it to allocate shares among the buyers. Two million were sold to European bidders.

'It went like a dream,' said the syndicate spokesman John Carney, an investment banker with Lazard Freres in New York. Mr Taubman alone, who accounted for 8 million of the shares on sale, took in dollars 100m.

Despite a 'road show' before the offering that visited 16 cities in five countries, a number of analysts had worried about investor interest, given the two-year slump in auction sales and Sotheby's shaky portfolio of art-buyer loans.

'It's simply remarkable this market wasn't saturated, particularly as it has had more than its share of questions about the recovery of the art market,' said Tony Russ of Dominick & Dominick, an investment advisory firm.

When Sotheby's Holdings last came to the stock market in 1988, buyers were rewarded with a fourfold gain on their investment, as the art market boomed around the world. But the recession has caused the wealthy to hold off selling their holdings, waiting for a recovery in the economy that would help sustain the price records set back in 1989.

In a two-week period that year, Sotheby's raised more than dollars 500m at auction. At a comparable one this May, the auction house raised dollars 79.7m, although this spring's sales were 33 per cent up on last year. Sotheby's is also exposed to dollars 187m worth of loans to art collectors, 11 per cent of them designated to its 'watch list'.

But the art market 'has definitely bottomed out', said Brian Fernandez, a San Francisco art dealer, and weak auction prices have created a considerable backlog of works that will have to come to market sooner or later.

'Sotheby's is situated to be the prime beneficiary of that recovery when it happens,' Mr Fernandez said.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Recruitment Genius: Claims Administrator

£16000 - £18000 per annum: Recruitment Genius: A position has arisen within th...

Ashdown Group: Development Manager - Rickmansworth - £55k +15% bonus

£50000 - £63000 per annum + excellent benefits : Ashdown Group: IT Manager / D...

Recruitment Genius: Security Officer

£16500 per annum: Recruitment Genius: Applicants must hold a valid SIA Door Su...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss