World Business: An Artful Takeover

London's Sotheby & Co. has become the world's largest art auction house by conscientious attention to both fine detail and broad brush stroke in the art of auctioneering. Last week Sotheby's also portrayed deft talent as a buyer. Outbidding U.S. Investment Executive Alex Hillman, it paid $1.5 million to win 75% control of the major U.S. auction house, Manhattan's Parke-Bernet Galleries. By acquiring its biggest U.S. competitor, Sotheby's secured a long-needed U.S. auction outlet and assured itself the role of auctioneer for most of the important American art collections that come up for sale.

Parke-Bernet was able to paint a rosy financial picture as recently as 1962, when its sales of $14.1 million placed it within chanting distance of Sotheby's $24.7 million. But lately the 220-year-old English firm has been auctioning most of the most important art collections, this season has sold a record $36 million worth; its $11 million sales of American collections alone exceeded Parke-Bernet's fading total turnover of $10.8 million. Without even asking Parke-Bernet to submit a proposal, for example, the Guggenheim Museum this year decided to send 50 paintings by Russian Wassily Kandinsky to Sotheby's rambling New Bond Street headquarters, where they were auctioned last month for $1.5 million (to make room in the Guggenheim).

One lure that caused American art sellers to bypass Parke-Bernet increasingly and go across the ocean is Sotheby's lower commission—only 10% on art and antiques and 15% on books and manuscripts—compared with P-B's 15% to 22% , made necessary by higher U.S. costs. They were tempted even more by the higher bids generated by the business acumen and showmanship of Sotheby Chairman Peter Cecil Wilson, 51, known in the auction world as "The Fastest Gavel in the West."

Parke-Bernet's handful of stockholders resisted Sotheby's bid for months, some expressing reluctance to relinquish control to a foreign company. Last week Richard Gimbel, the sole remaining U.S. stockholder, charged that "the American flag has been sold down the river." Sotheby's Wilson tried to soothe feelings with artful reasoning: "I'm sure you would find people in my country who said the same thing when Ford bought into England. One-way traffic is undesirable."