Art: The Anatomy of a Deal

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In late 1987 the name of Alan Bond was riding very high in America, and in Australia he was a hero. "Bondy," as his country called him, was the prime mover in the syndicate that funded the design, construction and testing of Australia II, the 12-meter sloop with the controversial winged keel that swept to victory over the U.S. defender off Newport in 1983, leaving, for the first time in yachting history, an empty plinth in the New York Yacht Club where the America's Cup used to stand.

A high school dropout who emigrated from England as a boy, Bond had come up the hard way, fueled by an insatiable drive to acquire, combine, take over. At 49 he was one of the richest men in Australia. He controlled an empire of assets under the umbrella of his holding company, Bond Corporation Holdings Ltd.: television stations, retailing, minerals and breweries around the world. He had even figured out a way of selling nonalcoholic beer to Muslims in the Middle East. Everything about him was on a large scale -- his ambitions, his capacity for risk, his appetite for publicity. Also, he had some Australian paintings. But he did not own an art collection that would cut ice outside his home city of Perth.

Like many another entrepreneur, Bond had never given much thought to art until he got rich. "This Pie-casso, now," he asked an Australian museum man over dinner in Sydney in the early 1980s, "is he worth having?" But a major impressionist collection was what Bond hankered after. He knew this could not possibly come cheap. He didn't care. He was, in short, a dealer's dream: Billionaris ignorans, a species now almost extinct in the U.S. but preserved (along with other ancient life-forms) in the Antipodes.

Above all, he wanted a Van Gogh. In 1987 he was the underbidder on Sunflowers, which fetched a record $39.9 million at Christie's in London. Then, as underbidder again, he just missed The Bridge at Trinquetaille, which sold for $20.2 million, also at Christie's, a few months later. So when he learned that Irises was coming up at Sotheby's in New York City in November of the same year, he decided to go the limit.

Irises was owned by John Whitney Payson, who had lent it to a small university museum in Maine. But with the news of Sunflowers' sale for $39.9 million -- and with little tax relief in sight if he gave it to a museum -- he decided to sell it through Sotheby's, which cautiously predicted a price between $20 million and $40 million and went to tell Bond the glad news. Sotheby's did not need to cast a delicate fly over Bond and strip it softly in. The fish was already halfway over the gunwale and champing eagerly at the gas tank.

Bond arranged with the financial services division of Sotheby's for an open- ended bridging loan of half the hammer price, whatever that would be. The other half he borrowed from an Australian bank.