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
News
ebookA unique anthology of reporting and analysis of a crucial period of history
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

Guru Careers: Pricing Analyst

£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...

Guru Careers: C# Project Team Lead

£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...

Day In a Page

Fifa corruption: The 161-page dossier that exposes the organisation's dark heart

The 161-page dossier that exposes Fifa's dark heart

How did a group of corrupt officials turn football’s governing body into what was, in essence, a criminal enterprise? Chris Green and David Connett reveal all
Mediterranean migrant crisis: 'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves,' says Tripoli PM

Exclusive interview with Tripoli PM Khalifa al-Ghweil

'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves'
Raymond Chandler's Los Angeles: How the author foretold the Californian water crisis

Raymond Chandler's Los Angeles

How the author foretold the Californian water crisis
Chinese artist who posted funny image of President Xi Jinping facing five years in prison as authorities crackdown on dissent in the arts

Art attack

Chinese artist who posted funny image of President Xi Jinping facing five years in prison
Marc Jacobs is putting Cher in the limelight as the face of his latest campaign

Cher is the new face of Marc Jacobs

Alexander Fury explains why designers are turning to august stars to front their lines
Parents of six-year-old who beat leukaemia plan to climb Ben Nevis for cancer charity

'I'm climbing Ben Nevis for my daughter'

Karen Attwood's young daughter Yasmin beat cancer. Now her family is about to take on a new challenge - scaling Ben Nevis to help other children
10 best wedding gift ideas

It's that time of year again... 10 best wedding gift ideas

Forget that fancy toaster, we've gone off-list to find memorable gifts that will last a lifetime
Paul Scholes column: With the Premier League over for another year, here are my end of season awards

Paul Scholes column

With the Premier League over for another year, here are my end of season awards
Heysel disaster 30th anniversary: Liverpool have seen too much tragedy to forget fateful day in Belgium

Liverpool have seen too much tragedy to forget Heysel

Thirty years ago, 39 fans waiting to watch a European Cup final died as a result of a fatal cocktail of circumstances. Ian Herbert looks at how a club dealt with this tragedy
Amir Khan vs Chris Algieri: Khan’s audition for Floyd Mayweather may turn into a no-win situation, says Frank Warren

Khan’s audition for Mayweather may turn into a no-win situation

The Bolton fighter could be damned if he dazzles and damned if he doesn’t against Algieri, the man last seen being decked six times by Pacquiao, says Frank Warren
Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

Blundering Blair quits as Middle East peace envoy – only Israel will miss him

For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
Fifa corruption arrests: All hail the Feds for riding to football's rescue

Fifa corruption arrests

All hail the Feds for riding to football's rescue, says Ian Herbert
Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

The Kurdish enclave still resisting the tyranny of Assad and Isis

In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

How I survived Cambodia's Killing Fields

Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

How Stephen Mangan got his range

Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor