After acquiring the London-based Phillips auction house and the Tajan group in Paris, French tycoon Bernard Arnault now seems increasingly determined to become Sotheby's major shareholder, well-informed sources said on March 9th 2000. The inauguration of Christie's new Paris headquarters on Thursday night probably stirred Arnault's desires while 3200 guests flocked in the plush building situated on the avenue Matignon before 160 happy few had dinner with François Pinault and his wife.
Arnault and Pinault have engaged in a duel for a take-over of the world auction market but the latter has had a clear advantage after acquiring Christie's two years ago.
Through his LVMH holding Arnault has however outmanoeuvred Pinault on the Internet battlefield with a global investment of $ 500 million. Still he feels like a midget as Phillips and Tajan only weigh $ 300 million annually compared with Christie's and Sotheby's which both recorded turnovers of $ 2 billion in 1999.
Now, the situation would be completely different if Arnault could lay his hands on Sotheby's at a time when the Internet has been causing a sudden revolution on the art market with the emergence of a new breed of consumers and new cultural perspectives.
Jean-Paul Claverie, his adviser, denied that LVMH had already made an offer to acquire 22,5% of Sotheby's shares held by Alfred Taubman, who bought the London-based auction group in 1983. “We first have to determine the scope of such an investment,” he stressed.
Taubman's shares represent 63% of the votes of Sotheby's Board of Directors and are enough to ensure a safe control of the company. In acquiring these shares Arnault would beat Pinault to the post and such prospect is exciting enough to push ahead in secret negotiations.
Alfred Taubman and Diana Brooks, respectively Chairman and General Director of Sotheby's resigned from their posts a few days ago pending investigations by U.S Justice regarding a possible breach of antitrust laws by the company. As a result Sotheby's' shares fell from $ 47 to $ 19 per unit in 10 months, meaning a good acquisition price in the offing for Arnault who has been dreaming of an opening on the U.S art market.
Now Arnault's sole a priori concerns the possibility of a stiff U.S Justice penalty imposed on Sotheby's for having breached antitrust laws but the prospect of winning his duel against Pinault seems however too tempting.
Meanwhile, Parisian auction groups are at a loss following the alliances formed by, Poulain- Le Fur with Sotheby's, Tajan with LVMH and PIASA with Pinault. Even before the adoption of the reform of their profession, Parisian groups have been destroyed by these recent mergers.
Several auctioneers are now trying to regroup in an effort not to resist against their Anglo-Saxon rivals but simply to survive when the reform becomes effective.
A few groups have formed alliances in order to keep a role in certain domains, notably ceramics, books and manuscripts and jewels while many auctioneers have decided to retire at the end of the year. Now one can already predict that the Drouot company of auctioneers will no longer represent a force to count with on the French art market.
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