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SOTHEBY'S have acquired Noortman Master Paintings, the Maastricht-based company owned by Robert Noortman, one of Europe's highest profile art dealers. It is the first time in the recent history of the firm that Sotheby's have bought a working dealership.

In a deal announced last week, Sotheby's acquired all the assets of Noortman Master Paintings, which are principally its art inventory, receivables and the gallery itself.

They now own 100 per cent of Noortman's outstanding shares in exchange for Sotheby's shares with an initial value of roughly $56.5m, or 1.95m shares at $29.01 per share.

In addition Sotheby's swallow Noortman's debts of approximately $26m.

Accordingly, Robert Noortman is now a significant shareholder in the auction house with approximately 3.2 per cent of their shares. He also joins Sotheby's International Advisory Board while remaining managing director of the company he founded almost 40 years ago.

According to the terms of the deal announced last Thursday, if certain performance criteria are met over the next five years, an additional 500,000 Sotheby's shares will be released to him. But the purchase price can be reduced if these criteria are not met.

Commenting on the auctioneers' entry into the world of international art dealing, Bill Ruprecht, president of Sotheby's, said: "This transaction brings to Sotheby's a pre-eminent dealer in very important markets and offers significant growth opportunities. We expect it to be accretive to earnings in 2006 and in the future."

He added: "The use of Sotheby's shares as the form of payment is also consistent with the rationale behind our recapitalisation last year which will better enable us to grow our business and enhance shareholder value."

Mr Noortman approached Sotheby's earlier this year to discuss a possible transaction and the auctioneers immediately responded to the possibilities of acquiring such a major force in the art world.

Robert Noortman, 60, opened his first gallery in Holland in 1968 and was a founding member of Pictura, the forerunner of TEFAF Maastricht, of which he was chairman for 20 years and president for two.

He has done business with the world's major institutions and is a benefactor of both the Rijksmusem and London's National Gallery, where The Noortman Room of Dutch cabinet paintings is on public view.

An expansive personality, Mr Noortman is famous for lavish parties at his castle near Maastricht and he is a prominent exhibitor at TEFAF, the Paris Biennale and Palm Beach! where he has exhibited headline-grabbing Rembrandts.

Sotheby's acquisition is not unprecedented. In 1990, the company bought the stock of the Pierre Matisse Gallery in New York for $87m.

By David Moss