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Jul 13 2020

James Murdoch to become majority stakeholder of Art Basel

by Fion Tse

JAMES MURDOCH may become majority stockholder of MCH Group through his investment company Lupa Systems. Image via Wikipedia

On July 10, the parent company of art fair Art Basel, MCH Group announced plans to sell up to 44 percent of its shares to James Murdoch’s private investment firm Lupa Systems. The final decision will be made on August 3 during an extraordinary general meeting of MCH Group. 

Rumors that James Murdoch’s father, Melbourne-born media mogul Rupert Murdoch, was interested in becoming a key investor of MCH Group began circulating following a June 3 announcement from the MCH Group stating that it was seeking capital to revamp its corporate strategy. On June 24, the canton of Basel-Stadt—which holds 33.5 percent of the Group’s shares—waived its subscription rights, making space for a new investor to become a majority stakeholder. 

According to a statement from MCH Group, James Murdoch will underwrite new subscription shares and purchase all unsubscribed shares, estimated to be at 30 to 44 percent of the company. The shares will be issued at a 25 percent discount compared to the average price from a month ago, at CHF 10.50 (USD 11) each. The capital increase for the Group will amount to CHF 104.5 million (USD 111.2 million). Additionally, Murdoch has agreed to a “15-year relationship” with a five-year lock-up period, during which he will not be able to redeem or sell his shares. The agreement also stipulates that MCH Group’s headquarters will remain in Basel, with its events, including Art Basel, to continue to operate in Basel and Zurich, as requested by the canton of Basel-Stadt. 

“This comprehensive package of measures is needed to master this situation,” said Bernd Stadlwieser, MCH Group CEO, referring to Covid-19-induced declines in sales, which amounts to CHF 130–170 million (UDF 138.3–180.8 million) this year. The 2020 editions of Art Basel were canceled in Hong Kong and Basel in February and June respectively, with a digital version subsequently held for each iteration in lieu of in-person fairs, orginally slated for March and September. The company in the meanwhile laid off 150 employees in April.

If the proposal goes through on August 3, James Murdoch will join the Group’s board of directors along with two partners of Lupa Systems, Jeff Palker and Eleni Lionaki, collectively comprising a third of the nine-member board. 

James Murdoch founded New York- and Mumbai-based Lupa Systems in 2019. The company focuses on investments in entertainment, media, technology, and sustainability. Murdoch served as a director of Sotheby’s board until 2012, and held the position of CEO at 21st Century Fox from 2015 to 2019. 

Fion Tse is an editorial intern at ArtAsiaPacific.

To read more of ArtAsiaPacific’s articles, visit our Digital Library.

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