Two Sotheby’s shareholders have filed suit in federal court in New York seeking to block the $3.7bn purchase of the auction house by the French-Israeli telecom magnate Patrick Drahi’s BidFair USA.
In separate lawsuits against Sotheby’s and its board members in US District Court for the Southern District of New York, the shareholders, Eli D. Goffmna and Shiva Stein, argue that information filed to the Securities and Exchange Commission on 12 July by Sotheby’s about its projected cash flow and other aspects of its finances is inadequate. Without that information, the plaintiffs argue, shareholders will be unable to make an informed decision on the transaction.
The lawsuits call on the court to block Sotheby's from completing the sale until the information sought is disclosed well in advance of a vote by shareholders.
Bidfair’s purchase of Sotheby’s, announced last month, calls for shareholders to receive $57 per share of Sotheby’s common stock. The deal means that after 31 years of public trading on the New York Stock Exchange, Sotheby's will—like its rival Christie’s—become a private company.
In a statement, Sotheby’s said it did not expect the lawsuits to have any impact on its target date for closing the sale in the fourth quarter of this year. “As the vast majority of all public company mergers over $100 million are the subject of shareholder litigation, the lawsuits filed were expected and routine,” it says.
