Bill Ruprecht, president and CEO of Sotheby’s, described the deal – a 50-year license with a 50-year renewal option – as a “partnership”, praising New York City-based Cendant as a company who would expand the business in a way that would bring the Sotheby’s brand more exposure among high net worth families throughout the United States. European offices and affiliates of Sotheby’s International Realty will not become part of the Cendant ‘family’ at this time.
Equally important for Sotheby’s core business is the releasing of funds to address the financial difficulties inherent in the company since the anti-trust affair. Added to the lease-back of Sotheby’s New York office last year and the securing of a long-term credit facility of up to $200m announced earlier this month, the $100m will dramatically expand the company’s financing capacity.
Financial guarantees were important in Sotheby’s acquisition of the Forbes collection of Fabergé (sold by private treaty to a Russian oligarch) and paintings from the Whitney collection to be sold in May.
Sotheby’s sell off real estate operation
Choosing to concentrate upon their auction business, Sotheby’s Holdings, Inc., have sold their real estate brokerage operations to Cendant Corporation. The total cash purchase price for the luxury brand and a 100-year licensing agreement was approximately $100m, plus ongoing fees based on future royalties from the development of a franchise business planned under the Sotheby's International Realty name.
