SBC Warburg offer for Christie’s abandoned

As this issue went to press, the news arrived that Christie’s had abandoned discussions with SBC Warburg regarding a possible recommended offer for the auction house, presumably because investors prepared to pay an acceptable price could not be found. The 1997 results for the Christie’s Group showed that while its auction totals were higher than Sotheby’s ($2.16 billion as against 1.6 billion), its net profit was lower ($37.1 million against $40.6 million). The ratio of auction revenues to auction sales fell from 18% in 1996 to 16.7% in 1997. This was a consequence of the increased proportion of high-value consignments, which earn lower rates of seller’s commission and buyer’s premium. Like Sotheby’s, there was an exceptional negative in the accounts: $8.48 million was written off because a loan had been made against the security of “an unusual but important collection”. Due to “a substantial delay” in bringing this collection to sale, during which prices in the market concerned have fallen. Spink, which forms part of the group, registered a loss of $1.28 million in 1997 as against a profit of $2.7 million in 1996, in part because “it was judged necessary to write down the value of older fine art stock by $2.7 million, principally in the field of Asian art”.