eBay denies interest in Sotheby's

Online auction leader eBay has denied recent UK newspaper reports that it wants to buy Sotheby's.

"There is no truth in that report," eBay chief executive Meg Whitman told reporters following up the story on Monday.

The previous day, the reports had suggested eBay was about to launch a £1 billion takeover offer for Sotheby's.

Sotheby's is deemed attractive to bidders at the moment because its share price has been almost in freefall since last November when it peaked at around $42 (£26.25). On Monday, Sotheby's closed at $21.31 after taking a nine per cent pop of $1.81 on the eBay rumour. Before eBay dampened enthusiasm for the supposed deal, Sotheby's traded as high as $25.19.

The reason for the drop in Sotheby's stock is that it is under investigation on both sides of the Atlantic over a possible fees-fixing cartel with rival Christie's. As well as the investigation, customers have filed lawsuits.

A bid by eBay for a bricks and mortar company is not completely off the wall, as last year the company bought San Francisco based Butterfield & Butterfield Auctioneers. eBay also has upmarket aspirations - it has hired Kathleen Guzman, a former president of auctioneers Phillips, to develop eBay Great collections.

Analysts say that eBay has the funds, but add that a more likely takeover prospect for Sotheby's is from Amazon. Sotheby's and Amazon already have a relationship, selling coins and other collectibles.

Another analyst felt that Sotheby's upmarket image could be harmed if it was to be taken over by a "flea market" such as eBay.