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eBay, Sotheby's Rumor Inspires Market Hike

Press reports that online auction house eBay may mount a billion-pound ($1.6 billion) bid for Sotheby's caused further market speculation Monday.

By midday trading, Sotheby's share price had risen over 20 per cent on the London Stock Exchange, following the article published by London newspaper The Independent over the weekend.

The rumored bid, which is being denied by eBay, follows allegations of price fixing at Sotheby's and the resignation of both the chairman and chief executive officer.

Acquisition of Sotheby's would be a great coup for eBay (EBAY), founded in 1995 and already worth 16 times more than the world's most famous art auction house, which started business 256 years ago.

Any successful move by eBay would affect Amazon.com's deal with Sotheby's, which allocates a special channel to the auctioneers.

Answering the rumors, eBay made a statement Monday maintaining that it is not interested in purchasing Sotheby's.

"We're not buying them. There's absolutely nothing to these rumors," said eBay spokesman Kevin Pursglove said after speaking to chief executive Meg Whitman.

eBay has recently been building up its fine art and antiques section, hiring Kathleen Guzman, a former president of auctioneers Phillips, to look after business development at eBay Great Collections.

British art critic Brian Sewell hit out last week at those who have been fueling the Sotheby's scandal, calling them "mangy curs" who are weakening the auction house and making it vulnerable to predators.

Sotheby's stands accused of colluding with rival house Christie's, which has now agreed to co-operate with a U.S. investigation in exchange for immunity.