-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V38iA5GjDe4CZOrHrqYDAd8cQIUVTJZHSt3UNTlAfn9nSBF8ElKf6EW198IBoGmy Ma0t3Ciz5xt0UoHXzMXuYg== 0001047469-02-007262.txt : 20021217 0001047469-02-007262.hdr.sgml : 20021217 20021217143155 ACCESSION NUMBER: 0001047469-02-007262 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20021217 ITEM INFORMATION: Other events FILED AS OF DATE: 20021217 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOTHEBYS HOLDINGS INC CENTRAL INDEX KEY: 0000823094 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 382478409 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09750 FILM NUMBER: 02859996 BUSINESS ADDRESS: STREET 1: 500 NORTH WOODWARD AVENUE STREET 2: SUITE 100 CITY: BLOOMFIELD HILLS STATE: MI ZIP: 48304 BUSINESS PHONE: 2486462400 MAIL ADDRESS: STREET 1: 500 NORTH WOODWARD AVENUE STREET 2: SUITE 100 CITY: BLOOMFIELD HILLS STATE: MI ZIP: 48304 8-K 1 a2096511z8-k.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) - December 17, 2002 SOTHEBY'S HOLDINGS, INC. ---------------------------------- (Exact name of registrant as specified in its charter) MICHIGAN 1-9750 38-2478409 - -------------------------------- --------------- --------------------- (State or other jurisdiction of (Commission File (IRS Employer incorporation or organization) Number) Identification No.) 38500 Woodward Avenue, Suite 100 BLOOMFIELD HILLS, MICHIGAN 48304 - ---------------------------------------- ------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (248) 646-2400 ------------------- ITEM 5. Other Events On December 17, 2002, Sotheby's (the "Company") entered into an agreement to sell its headquarters building located at 1334 York Avenue, New York, NY (the "Building") to RFR Holding, LLC ("RFR") for $175 million in cash. A copy of the press release announcing this sale agreement is attached as Exhibit 99(a). The Company will lease the Building back from RFR for an initial 20-year term, with options to extend the lease for two additional 10-year terms. The rental obligation during the initial term will be approximately $18.0 million per year, escalating 7% every three years during the term of the lease. The lease will be classified as a capital lease in accordance with generally accepted accounting principles. Net cash proceeds received from the sale of the Building will primarily be used to repay $100 million in short-term borrowings under the Term Facility of the Company's Amended and Restated Credit Agreement due February 11, 2003 and to fund the $20.1 million fine imposed on the Company by the European Commission due February 8, 2003. The remaining proceeds will be used for general corporate purposes. This sale-leaseback transaction will be dilutive to the Company's earnings in 2003 due to increased charges for interest and depreciation resulting from the capital lease obligation and capital lease asset that will be reflected on the Company's consolidated balance sheet. SOTHEBY'S HOLDINGS, INC. AND SUBSIDIARIES SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SOTHEBY'S HOLDINGS, INC. By: /s/ MICHAEL L. GILLIS ----------------------------------- Michael L. Gillis Senior Vice President, Controller and Chief Accounting Officer Date: DECEMBER 17, 2002 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION ----------- ------------ 99(a) Press Release, dated December 17, 2002 EX-99.(A) 3 a2096511zex-99_a.txt EXHIBIT 99(A) EXHIBIT 99(a) Sotheby's PRESS RELEASE - ------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE DIANA PHILLIPS MATTHEW WEIGMAN (212) 606-7176 FAX: (212) 606 7381 SOTHEBY'S ANNOUNCES AGREEMENT TO SELL AND LEASE BACK YORK AVENUE HEADQUARTERS FOR $175 MILLION SALE STRENGTHENS BALANCE SHEET $100 MILLION OF SHORT-TERM DEBT TO BE REPAID DECEMBER 17, 2002 -- Sotheby's announced today that it has entered into an agreement to sell its York Avenue headquarters for $175 million to RFR Holding, LLC. The Company will lease back the building, widely regarded as the best auction house facility in the world, from RFR Holding for a period of up to 40 years, which includes renewals. "This is an outstanding opportunity for Sotheby's," said Bill Ruprecht, Sotheby's President and Chief Executive Officer. "The attractive price of $175 million reflects the high asset quality, desirable location and Sotheby's bright future prospects. Sotheby's, similar to other major corporations, has decided to enter into a sale-leaseback transaction as a means of financing to provide long-term liquidity for our business. It will also allow Sotheby's to pay down $100 million in short-term debt as well as antitrust fines, which strengthens our balance sheet." Mr. Ruprecht added: "Sotheby's expects to report a gain on the sale of the building in the range of $25 million, which will be amortized over the initial term of the lease as required by the relevant accounting rules. "Sotheby's looks forward to a long and exciting future in our worldwide headquarters that are without equal in the auction world," continued Mr. Ruprecht. "After an architectural makeover, which added six floors and completely redesigned the existing four floors, we have a state-of-the-art auction facility that has received international acclaim, particularly for its tenth-floor exhibition space. The renovation and expansion were designed with Sotheby's unique auction business in mind and ever since it opened, it has offered us a competitive advantage. All our New York auction operations are centralized in one convenient location and, importantly, the building provides permanent exhibition and storage space for each department, allowing our specialists to `live` with their objects. "We are delighted at the prospect of a future affiliation with RFR Holding whose ownership of premier locations, including the Seagram Building and Lever House, show a clear appreciation for buildings of great quality." "RFR Holding is delighted to add the Sotheby's Building to our expansive portfolio of prime Manhattan commercial real estate," said Aby Rosen, Principal of RFR Holding LLC. "We are privileged to have Sotheby's as our tenant and look forward to a mutually rewarding long-term relationship." J.P. Morgan Securities, Inc. acted as exclusive financial advisor to Sotheby's. ABOUT SOTHEBY'S HOLDINGS, INC. Sotheby's Holdings, Inc. is the parent company of Sotheby's worldwide live and Internet auction businesses, art-related financing and real estate brokerage activities. The Company operates in 34 countries, with principal salesrooms located in New York and London. The Company also regularly conducts auctions in 13 other salesrooms around the world, including Australia, Hong Kong, France, Italy, the Netherlands, Switzerland and Singapore. Sotheby's Holdings, Inc. is listed on the New York Stock Exchange and the London Stock Exchange. # # # -----END PRIVACY-ENHANCED MESSAGE-----