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Deal to take Sotheby’s private will throw handy cloak of secrecy over sales, earnings, China art players say

  • Being private would free auction house from sales and revenue disclosures, allowing it more flexibility to accommodate clients’ wishes, say collector and dealer
  • Chen Dongsheng, owner of auction house China Guardian and the biggest single Sotheby’s shareholder, is silent on Frenchman’s US$3.7 billion offer for company

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Patrick Drahi (centre) pretends to hit himself on the head with a mallet during the initial public offering of his telecommunications company on the New York Stock Exchange. He has offered to buy auctioneer Sotheby’s in a US$3.7 billion deal that would see its shares delisted from the exchange. Photo: EPA-EFE
Art collectors and dealers in China reacted positively on Tuesday to news of French-Israeli telecoms billionaire Patrick Drahi’s offer to buy auctioneer Sotheby’s, which would see it become a privately held company for the first time in more than 30 years.
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Chen Dongsheng, the Chinese businessman who owns the biggest single stake in Sotheby’s through his Taikang Insurance company, has yet to comment on Drahi’s US$3.7 billion deal to privatise the 275-year-old auction house.

“For me, the art business has always been a human business and flexibility is key to getting work done. I assume that Sotheby’s should be more flexible when it becomes a private company,” said Michael Xufu Huang, the 25-year-old co-founder of the M Woods museum in Beijing and an active art collector.

As for what kind of flexibility Chinese buyers are looking for, one dealer who requested anonymity because of the sensitivity of the subject said that the art market often operates in grey areas and a private company could accommodate clients’ wishes more easily.

A security guard watches over an untitled piece by Mark Rothko during a preview in May for Sotheby's auctions in New York. The auction house has seen rival Christie’s take the lead in fine art sales in recent years. Photo: AFP
A security guard watches over an untitled piece by Mark Rothko during a preview in May for Sotheby's auctions in New York. The auction house has seen rival Christie’s take the lead in fine art sales in recent years. Photo: AFP
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“For example, the volume and locations of transactions can now be kept secret. It should also be able to offer more flexible payment terms. Before, Sotheby’s has been hemmed in by having to make its audited results, including its tax bill, public knowledge,” he said.

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