Redline Bid High for Artnet Shares in Takeover Bid – artmarketblog.com

redline1 Redline Bid High for Artnet Shares in Takeover Bid   artmarketblog.comThe artnet takeover saga continues with Luxembourg-based asset management company Redline Capital Management S. A. announcing that they will offer shareholders of the online transaction platform for the art market EUR 6.40 cash per share.

Representing an attractive premium of more than 31 pct compared to the volume-weighted average share price over the twelve months prior to the offer’s first announcement, the Redline offer is valid from 31 August to 28 September 2012.

After their initial hostile takeover attempt was blocked by artnet founder Hans Neuendorf and CEO Jacob Pabst during the shareholders’ annual meeting on Wednesday, August 8, 2012, Redline have accused by CEO and minority shareholder Hans Neuendorf of attempting to “frighten off new investors with all kinds of legal tricks”.

Redline clearly believe that the artnet business has great potential but only if the current management team and business structure undergo significant changes.  According to a Redline press release, “We state very clearly: Today, artnet is a poorly managed, unprofitable and undercapitalised company, whose management structures do not meet the modern corporate governance requirements for an international listed company. artnet was a leader in art media and e-commerce”.

Redline believes that the key profit centres for artnet are their Gallery network and price database.  Although they acknowledge that artnet’s online auction business continues making losses, Redline believe it could become profitable if it had triple the volume – an undertaking which they estimate would require 5 to 8 million Euros in capital to finance product development and marketing.

Artnet ceased publication of their online publication, Artnet Magazine, in June due to the fact that during its 16 years of digital life, the magazine was never able to pay its own way.  Additionally, the French and German-language publications were also closed.

Redline are already planning for their future as majority shareholders of artnet stating that “After a successful takeover offer, Redline as a major shareholder intends to support artnet, together with experienced partners from the art world, in rebuilding and expanding the Berlin and New York based company, which is currently suffering from a chronic lack of capital, declining investors’ confidence, management deficiencies and poor profitability.”

**Nicholas Forrest is a Sydney/London based art market analyst, art consultant and writer.  He is the founder of the Art Market Blog (artmarketblog.com) which offers independent commentaries as well as research and analysis on the current art market, and has recently been published in Fabrik magazine, Verve magazine, Visual Art Beat magazine, Australian Art Collector magazine, Art & Investment magazine and many others.  Nic has made several radio appearances (both nationally and internationally) as an art market expert and has received press from the likes of the New York Times, Conde Nast Portfolio and Times of London.

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