Sotheby's off the block as scandal deters bids

Sotheby's has been taken off the auction block after the family behind the business failed to find a buyer.

The Taubman family, which controls the 259-year-old auction house, yesterday said an eight month-long attempt to sell their stake had been abandoned. Potential buyers were said to have been deterred by the legal entanglements following charges of price-fixing with rival Christies.

"The legacy of those issues combined with the historic competition in this business and the margin pressure were sobering issues for potential acquirers," said chief executive Bill Ruprecht. Sotheby's said in a statement that it had received "considerable interest" in the company but that a "satisfactory conclusion could not be reached".

The art world was scandalised by the price-fixing conspiracy that ended with the imprisonment of former chairman Alfred Taubman. The 78- year old was sentenced to a year and a day's jail by the US district court judge, who described the crime as motivated by "arrogance and greed".

The two auction houses were found to have rigged the market by colluding to set non-negotiable commission prices to ensure their continuing profitability. Sotheby's and Christies account for about 90% of the world's live auctions of art, jewellery and furniture. Mr Taubman was found guilty of overcharging clients by almost $44m (£28m) over six years.

Sotheby's has been struggling financially and has not recorded a profit since 1999. The most recent figures available, for 2001, showed it falling to a $42m loss.

But the company said a $175m deal to sell its New York headquarters this month and the securing of a $75m credit line had put the business on a more stable footing. The proceeds will be used to pay off loans and anti-trust fines linked to price-fixing. It is also saving costs by scrapping its online auctions division.

Last October it was fined £14m by the EU for actions tied to the price-fixing case.

Sotheby's hopes to capitalise on the decision by rival Phillips de Pury & Luxembourg to cut back its US business after a difficult year.

The Taubman family is locked in another legal battle relating to shopping mall company Taubman Centers. Simon Property, which is trying to acquire the company, is seeking to overturn the family's voting rights, alleging they took control under the guise of a restructuring without reference to shareholders.

Mr Taubman built his fortune as a mall developer and saved Sotheby's from collapse in 1983. During last year's case he filed letters of support from figures including Henry Kissinger, ex-president Gerald Ford, Queen Noor of Jordan and TV journalist Barbara Walters.