Filing Details

Common Stock, par value

$0.01 per share

(Title of Class of Securities)

835898107

(CUSIP Number)

1	NAMES OF REPORTING PERSONS
	I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
	Patrick Drahi
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a)	☐
				(b)	☑
3	SEC USE ONLY
4	SOURCE OF FUNDS (SEE INSTRUCTIONS)
	AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(D) OR 2(E)				☐
6	CITIZENSHIP OR PLACE OF ORGANIZATION
	Israel
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER
			826,399
		8	SHARED VOTING POWER
			6,903,9481
		9	SOLE DISPOSITIVE POWER
			826,399
		10	SHARED DISPOSITIVE POWER
			0
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	7,730,347 (see Item 5)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)				☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	16.6%2
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
	IN

¹ As of the date hereof, the Reporting Person owns 826,399 shares of common stock, par value $0.01 per share (“Shares”), of the Issuer (as defined below).  However, as a result of BidFair (as defined below) entering into the Voting Agreement (as defined below), the Reporting Person may be deemed to have shared voting power to vote up to an aggregate of 6,903,948 Shares deemed beneficially owned pursuant to Rule 13d-3 (“Rule 13d-3”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with respect to the matters covered by the Voting Agreement.  Pursuant to Rule 13d-4 (“Rule 13d-4”) under the Exchange Act, the Reporting Person disclaims all such beneficial ownership.

² Calculation of percentage based on 46,612,805 Shares issued and outstanding as of June 10, 2019, as represented to the Reporting Person by the Issuer pursuant to the Merger Agreement (as defined below).

1	NAMES OF REPORTING PERSONS
	I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
	BidFair USA LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a)	☐
				(b)	☑
3	SEC USE ONLY
4	SOURCE OF FUNDS (SEE INSTRUCTIONS)
	Not applicable
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(D) OR 2(E)				☐
6	CITIZENSHIP OR PLACE OF ORGANIZATION
	United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER
			0
		8	SHARED VOTING POWER
			6,903,9483
		9	SOLE DISPOSITIVE POWER
			0
		10	SHARED DISPOSITIVE POWER
			0
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	6,903,948 (see Item 5)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)				☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	14.8%4
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
	OO

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This statement on Schedule 13D relates to shares of common stock, par value $0.01 per share (the “Shares”), of Sotheby’s (the “Issuer”). The address of the principal executive offices of the Issuer is 1334 York Ave., New York, New York 10021.

Item 3.

Source and Amount of Funds or Other Consideration

Mr. Drahi expended an aggregate of approximately $32.8 million of his own investment capital to acquire the 826,399 Shares held by him.

The Reporting Persons may effect purchases of Shares through margin accounts maintained for them with brokers, which extend margin credit as and when required to open or carry positions in their margin accounts, subject to applicable federal margin regulations, stock exchange rules and such firms’ credit policies. Positions in Shares may be held in margin accounts and may be pledged as collateral security for the repayment of debit balances in such accounts. Such margin accounts may from time to time have debit balances. In addition, since other securities may be held in such margin accounts, it may not be possible to determine the amounts, if any, of margin used to purchase Shares.

Item 4.

Purpose of Transaction

Merger Agreement

On June 16, 2019, the Issuer entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Issuer, BidFair and BidFair MergeRight Inc., a wholly-owned subsidiary of BidFair (“Merger Sub”). BidFair and Merger Sub are ultimately controlled by Mr. Drahi. Pursuant to the Merger Agreement, Merger Sub will be merged with and into the Issuer (the “Merger”), with the Issuer continuing as the surviving company in the Merger.

Subject to the terms and conditions set forth in the Merger Agreement, at the effective time of the Merger, each Share issued and outstanding immediately prior to the effective time of the Merger (other than Shares owned by the Issuer or owned by any subsidiary of the Issuer, BidFair, Merger Sub, or any other subsidiaries or affiliates of BidFair and Shares owned by stockholders of the Issuer who have properly exercised and perfected and not withdrawn a demand for appraisal rights under Delaware law) will be converted into the right to receive $57.00 in cash, without interest (the “Merger Consideration”).

The consummation of the Merger is subject to various conditions, including, among others, customary conditions relating to (i) the adoption of the Merger Agreement by holders of a majority of the Issuer’s outstanding Shares, (ii) the expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, as well as certain non-U.S. regulatory approvals, (iii) written determination from the Committee on Foreign Investment in the United States that there are no unresolved national security concerns with respect to the transactions contemplated by the Merger Agreement, (iv) the absence of a legal restraint or injunction that prohibits or enjoins the consummation of the Merger or any other transactions contemplated under the Merger Agreement  and (v) the absence of a Company Material Adverse Effect (as defined in the Merger Agreement). The obligation of each party to consummate the Merger is also conditioned on the accuracy of the other party’s representations and warranties (subject to certain materiality exceptions) and the other party’s compliance, in all material respects, with its covenants and agreements under the Merger Agreement.

BidFair and Merger Sub have secured committed financing, consisting of a combination of equity financing to be provided by NEXT ALT S.à r.l., an affiliate of BidFair, and debt financing from BNP Paribas Securities Corp. and BNP Paribas, the aggregate proceeds of which BidFair and Merger Sub have represented will be sufficient for BidFair and Merger Sub to pay the aggregate Merger Consideration and other fees and expenses under the Merger Agreement.  BidFair and Merger Sub have agreed to use their respective commercially reasonable efforts to obtain the financing on prescribed terms and conditions.  In addition, an affiliate of BidFair has provided the Issuer with a guaranty in favor of the Issuer, which guarantees the payment obligations of BidFair’s affiliate under equity financing and certain payment obligations of BidFair and Merger Sub under the Merger Agreement.  The Merger Agreement does not contain a financing condition.

The Merger Agreement provides for certain customary termination rights of the Issuer and BidFair, including the right of either party to terminate the Merger Agreement if the Merger is not completed on or before December 13, 2019 (the “Outside Date”), provided that the Outside Date may, under certain circumstances, be extended up to an additional 90 days by either party.  The Issuer may terminate the Merger Agreement, in certain circumstances, including to accept a Superior Proposal on the terms set forth in the Merger Agreement.  The Merger Agreement also provides that (1) the Issuer will be required to pay BidFair a termination fee of $110,860,000 million and/or reimburse BidFair for up to $4 million of expenses in certain circumstances, including if the Issuer terminates the Merger Agreement to accept a Superior Proposal and (2) BidFair will be required to pay the Issuer a termination fee of $221,710,000 million, in certain other circumstances due to BidFair’s inability to obtain the debt financing.

The foregoing description of the Merger Agreement is qualified in its entirety by the full text of the Merger Agreement, which is attached hereto as Exhibit 1 and is incorporated by reference herein in answer to this Item 4.

Voting and Support Agreement

On June 16, 2019, concurrently with the execution of the Merger Agreement, BidFair and Merger Sub entered into a Voting and Support Agreement (the “Voting Agreement”) with certain funds affiliated with Third Point LLC, Domenico De Sole, and Thomas S. Smith Jr., each a stockholder of the Issuer, pursuant to which such stockholders agreed, among other things, to vote their Shares in favor of the adoption of the Merger Agreement and the transactions contemplated by the Merger Agreement, and agreed to certain restrictions on their ability to take actions with respect to the Issuer and their Shares.  The Issuer is a third party beneficiary in respect of certain provisions contained therein.

The foregoing description of the Voting Agreement is qualified in its entirety by the full text of the Voting Agreement, which is attached hereto as Exhibit 2 and is incorporated by reference herein in answer to this Item 4.

Item 5.

Interest in Securities of the Issuer

Item 6.

Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

The information set forth under Items 3, 4 and 5 and the agreements set forth on the Exhibits attached hereto are incorporated herein by reference. Other than the Merger Agreement and the Voting Agreement described above, to the best of the Reporting Persons’ knowledge, there are no contracts, arrangements, understandings or relationships (legal or otherwise) between any Reporting Person, or any Reporting Person subsidiary or any person listed on Schedule A hereto, and any person with respect to the securities of the Issuer, including, but not limited to, transfer or voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies, including any securities pledged or otherwise subject to a contingency the occurrence of which would give another person voting power or investment power over such securities.

SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: June 26, 2019

The name, business address and present principal occupation of the sole manager of BidFair USA LLC is set forth below. Mr. Berrebi is a citizen of France and Israel.

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