A model poses with the "The Apollo Blue" and "The Artemis Pink" diamonds, mounted as earrings, during a press preview by Sotheby's auction house, on May 11, 2017 in Geneva. Image Credit: AFP

London. French media mogul Patrick Drahi’s plan to acquire Sotheby’s received a boost with a prominent shareholder advisory firm coming out in support of the deal.

Institutional Shareholder Services Inc urged investors to support the $2.7 billion takeover of the auction house by Drahi’s BidFair USA LLC. The advisory firm argued the offer comes at a substantial premium and that no other bids have emerged since the deal was announced in June, despite speculation that others may be interested.

Sotheby’s shareholders may have preferred that the company run a full auction, given previous interest from other parties, ISS said.

“Its choice to not conduct an auction is ironic, given Sotheby’s business,” ISS said in its report on Friday.

A representative for Sotheby’s was not immediately available for comment.

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ISS noted that the $57-a-share cash bid is a 61 per cent premium over the company’s unaffected share price. Despite that Sotheby’s shares traded above that price on the expectation other buyers would emerge, none have come forward, it said.

“The all-cash offer represents a significant premium to the unaffected price and implies an attractive valuation, no competing offers have emerged, and the company’s projections suggest that it will experience stagnate near-term results on a stand-alone basis,” ISS said in its report. “As such, support for the merger is warranted.”

BidFair is a wholly owned entity by Drahi, an art collector who controls publicly traded telecommunications business Altice Europe NV, which has more than 30 million customers. Drahi is worth $10.3 billion, according to the Bloomberg Billionaires Index.

Activist investor Dan Loeb’s Third Point is Sotheby’s second-largest holder and plans to support the deal. Loeb led a proxy fight at the auction house in 2014 that saw three new directors appointed to its board, including Loeb, as the result of a settlement.