ARNAULT EXPECTED TO FORM E-VENTURE
Byline: Robert Murphy
PARIS — LVMH Moet Hennessy Louis Vuitton chairman Bernard Arnault is expected to announce today a new joint venture with Accel-KKR, a U.S. Internet development firm. At the same time, market reports here indicate that Arnault has renewed his interest in making a bid to take control of the embattled Sotheby’s auction house in New York.
To be called AKA Technology, the Internet joint venture will promote online strategies for so-called “old-economy” businesses, ranging from supermarkets to fast-food chains.
Arnault will hold a 50 percent stake in the venture via his online investment fund Europatweb. Accel-KKR will control the other half. Each investor will endow the firm with $25 million. Further details of the partnership were not immediately available.
Accel-KKR was founded in February by venture capitalist firm Accel Partners and Kohlberg Kravis Roberts, the leveraged-buy-out house, to assist companies with integrating their online and off-line assets. This year it created an electronic business-to-business platform for McDonald’s, linking the fast-food chain with its distributors.
It is not the first time Arnault has dealt with the firm. KKR is an investor in FirstMark, one of the members of a consortium that in July was awarded a license to install and operate wireless local loop networks in France. Other investors included Groupe Arnault and French utilities giant Suez Lyonnaise des Eaux.
Since Arnault created Europatweb with a $500 million bank account in July 1999, it has quickly become one of Europe’s most aggressive Internet investment firms. In just over a year, it has acquired stakes in about 50 online ventures, including Quios, Liquidation.com and MetaMarkets. The firm has also become a site operator. It contributed to the creation of Liberty Surf, the French free Internet service provider, and is orchestrating the launch of Zebank, an online banking project.
Meanwhile, Arnault appears to be zeroing in on a non-Internet-related deal.
Market rumors here indicate Arnault is preparing a bid to take control of Sotheby’s auction house. Although an LVMH spokesman denied an imminent bid was a priority, he confirmed Arnault’s interest in the embattled auction house. Arnault is believed to have already approached Sotheby’s with a bid earlier this year.
Arnault’s renewed interest in the auction house follows last week’s decision by its former chairman and controlling shareholder, Alfred Taubman, to pay a $186 million settlement in an antitrust suit alleging Sotheby’s and Christie’s — the world’s two largest auction firms — had colluded in a price-fixing scheme.
Early last week, Taubman’s spokesman said the shopping center tycoon would consider selling his stake in the 226-year-old auction house. Taubman holds 13.2 million Sotheby’s shares, valued at more than $300 million. He has a 22 percent stake in the firm and controls 64 percent of the voting rights.
If Arnault makes a successful bid for Sotheby’s, he would become one of the most influential figures in the international art world. The luxury titan already holds stakes in the auction houses Phillips and L’Etude Tajan and French art journal Connaissance des Arts. In July he acquired the New-York based Art & Auction publication, which provides coverage of the international art and auction market.
His fierce business rival, Francois Pinault, head of the Pinault-Printemps-Redoute retail conglomerate, controls Christie’s.