Drahi Borrowing $1.1 Billion to Finance Sotheby’s Deal
Sotheby’s Borrowing $1.1 Billion to Finance Buyout by Drahi
(Bloomberg) -- French billionaire and art collector Patrick Drahi is taking out $1.1 billion of debt to help finance his $2.7 billion acquisition of Sotheby’s.
Drahi is selling $550 million of bonds through BidFair MergeRight Inc., a unit which has been set up as part of the buyout of the auction house, according to a person with knowledge of the matter. The eight-year notes, which can’t be bought back for three years, are expected to price Friday, said the person, who asked not to be identified as the details are private. A loan of the same size is also being issued, and the deal includes a nearly $2 billion equity component as well.
Drahi, the media mogul who controls Altice Europe NV, said he was buying Sotheby’s earlier this year, taking it private after more than three decades as a public company. In addition to funding the buyout, the proceeds will also repay Sotheby’s $990 million of outstanding debt, according to Moody’s Investors Service. The acquisition is expected to close later this year.
BNP Paribas SA and Goldman Sachs Group Inc. are managing the bond sale, the person said.
S&P Global Ratings cut Sotheby’s credit grade to B+ from BB- on Sept. 17, citing higher adjusted leverage following the Drahi takeover.
--With assistance from Gowri Gurumurthy.
To contact the reporter on this story: Molly Smith in New York at msmith604@bloomberg.net
To contact the editor responsible for this story: Nikolaj Gammeltoft at ngammeltoft@bloomberg.net
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