Two shareholders of Artnet AG (ART) said they are weighing a bid to acquire the art-market-data provider next month. The company’s founder and chief executive officer Hans Neuendorf said he opposes a takeover.

Artnet announced yesterday that Neuendorf, 74, will step down as CEO to make way for his son Jacob Pabst with effect from July 1. Today the company said in a statement it is closing its online magazine, a step it expects will increase profit by about 2 million euros ($2.5 million) in 2013.

“Redline is considering an acquisition of Artnet,” said Sergey Skaterschikov, who is a board member of Luxembourg-based Redline Capital Management SA, which owns 9.07 percent of Artnet’s shares, and the founder of Skate’s Art Market Research. “Artnet requires financing. The company is bleeding. If they need support, we can offer it.”

Artnet, which operates a widely used database of auction prices, Internet auctions and analytics reports, has zero bank debt, Neuendorf said in a phone interview. The stock had gained 54 percent this year through yesterday, when it closed at 6.29 euros, valuing the Berlin-based company at 35 million euros. Shares of Artnet rose as high as 6.45 euros on the news.

Artprice.com, a French rival, has fallen more than 50 percent in the same period in Paris trading.

“I have always said I am not interested in selling my shares,” said Neuendorf, who owns more than 26 percent of the company he founded 20 years ago.

Art, Money

“I am against this because we don’t know what they plan for the company,” he said. “They don’t know art, they know money. Artnet likes to focus on art and artists. We are not focused on money alone and we don’t find this sympathetic.”

Redline’s chairman is Russian billionaire Vladimir Evtushenkov, who controls Moscow-based investment company Sistema JSFC. (AFKS) Sistema owns majority shares in OAO Mobile TeleSystems, Russia’s largest mobile-phone operator, and the oil producer and refiner OAO Bashneft. (BANE) Sistema also controls about 49 percent of Russian oil producer OAO Russneft.

“Artnet has a good product,” said Ruediger K. Weng, chief executive officer of Weng Fine Art AG, of Krefeld, Germany, which owns 4.03 percent of Artnet’s shares. “It’s just a poorly managed company. We put pressure on them. The CEO resigned. This company needs professional management.”

Weng, who advises Redline on investing in Artnet, also said that “a new investor like Redline would totally change the picture for Artnet. They have all the money they need.”

New Products

Artnet’s revenue slipped 2 percent last year to 13.3 million euros, and its operating loss more than doubled to 70,000 euros. Neuendorf said the company has invested more than 5 million euros in new products in recent years.

Weng Fine Art (WFT) is an art dealership that serves corporate buyers in Europe. It trades without a gallery, instead buying and selling through auction houses and through private deals on behalf of clients, according to its website.

Neuendorf’s son and successor Pabst has worked at Artnet since 2000. Neuendorf will stay on as a consultant. He said Pabst had convinced him to close down the magazine on the basis that it was “too much of a burden.” Other shareholders raised the same complaint, he said.

“My last day is today,” Walter Robinson, the online magazine’s editor, said in a telephone interview yesterday. “The magazine has been in existence for 16 years. All of a sudden it came to a screeching halt today.”

‘Burning’ Money

“With the magazine burning something like a million or so a year,” Weng said, closing it “is the only option they had.”

Skaterschikov said Skate’s made offers to take over Artnet’s media segment two years ago, “but they weren’t interested.” Both he and Weng spoke in telephone interviews.

Artnet’s next shareholders’ meeting is on July 11. Neuendorf said he’s confident Weng and Skaterschikov would not be able to purchase enough shares to stage a hostile takeover.

Robert de Rothschild, an acquaintance and long-time investor, owns 9 percent, he said. Neuendorf’s acquaintances are also among the many small shareholders who don’t want to sell, he said.

Both Weng and Skaterschikov said the shareholders aren’t interested in a hostile takeover if agreement can be reached.

“We are prepared to support Mr. Pabst, subject to his vision for the company,” Skaterschikov said. “The decision for Mr. Neuendorf to step down was long overdue. We welcome it but are interested to learn more about the economic arrangement for his advisory contract and the CEO package for his son.”

Artnet’s price database is a major resource for art-market professionals, including dealers, auction houses and art lenders.

“Artnet is a really important tool for us to value art,” said Suzanne Gyorgy, global head of art advisory and finance at Citi Private Bank. “The Citi has been valuing art for collateral purposes for over 30 years. We used to go back to auction catalogs and rely on our memory. And with Artnet, it’s at our fingertips.”

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