Christie's to go under the hammer for pounds 500m

Christie's International will this week respond to a pounds 500m bid from SBC Warburg Dillon Read, the Swiss investment bank, in conjunction with Joe Lewis, the Bahamas-based billionaire who holds a 29.6 per cent stake in the auctioneer. As Andrew Verity reports, the board is expected to accept the offer.

The board of Christie's met last night to decide on the unprecedented offer, which would see the top auction house valued at more than pounds 500m, up from pounds 385m just 10 days ago. The meeting followed confirmation from Christie's last Wednesday that it was considering a revised offer for the company. Five days before, the auctioneer announced it was rejecting an initial bid on the grounds that it was not in the interests of shareholders. While Christie's did not disclose the identity of the original bidder, it is believed that SBC Warburg Dillon Read made an earlier, lower offer.

SBC Warburg Dillon Read, which yesterday declined to comment, is thought to be offering 300p a share for the business. Two unnamed Christie's directors, one of whom bought 5,000 shares in December while the other bought 10,000 shares in May, are set to gain over pounds 100,000 each from the sale.

Brian Keelan, the SBC corporate financier arranging the deal, is known to be keen to retain Christopher Davidge, Christie's chief executive. Joe Lewis, one of the 10 richest British people, will pledge his stake and give undertakings to SBC.

The deal will give Christie's access to SBC's client-base of thousands of high-net worth individuals. It will also allow itto steal a march on its rival, Sotheby's, by using SBC's financial muscle to underwrite auctions of valuable art collections.

Auction houses are increasingly being forced by their customers to guarantee a minimum price on items being auctioned. Christie's has seen business mushroom in the last year as it outbid Sotheby's on minimum prices. Last year, Christie's auctioned fine art worth just over pounds 1bn, topping Sotheby's sales for the first time in 40 years and boosting sales on the previous year by more than 15 per cent.

The company recently offered a minimum price of $130m for the collection of the Ganz family in an underwritten auction, which in the event fetched $206m. After shareholders marked up the company, it was forced to warn the market it did not expect to make huge profits from the sale.

In contrast, Sotheby's, irritated at Christie's winning bid to sell the Ganz collection, tried the same gamble and failed. It offered a minimum of $55m for the collection of Evelyn Sharp, the American property magnate, which later fetched just $41.3m.