Seagram Takes A Multimedia Gulp
Edgar M. Bronfman has seen the future, and it is multimedia. That's the subtext of his May 26 disclosure that Seagram has bought 21.1 million shares of Time Warner stock. Bronfman, CEO of the Montreal-based liquor giant, said in a 13D filing with the Securities & Exchange Commission that Seagram bought its 5.7% stake "solely for purposes of investment." Seagram also filed with the Federal Trade Commission under the Hart-Scott-Rodino Antitrust Improvements Act for permission to boost its stake to 15%.
Bronfman's disclosure comes a week after Time Warner clinched a $2.5 billion strategic alliance with regional telephone company U.S. West. By linking up with U.S. West, Time Warner is accelerating a plan to offer sophisticated multimedia services over its cable system. Seagram began buying shares on Feb. 2, when rumors of the deal began to move. Time Warner "is the best positioned company to benefit from future growth" in the media business, Bronfman said in a statement.
Seagram owns 24.3% of chemical giant DuPont. But it has no other major media investments. A Seagram spokesman says the company only informed Time Warner of its purchase on May 26. But Bronfman insists that he intends to support Time Warner's management. For its part, Time Warner says "we're happy to have them as shareholders." The company's stock, which has risen sharply, closed at 38 on May 26, up 1 11/32.