Seagram stox rally too late for Bronfmans
Sale may signal dismay with biz
The sales will also likely reinforce speculation that Charles Bronfman is disenchanted with the company's move into entertainment spearheaded by his nephew, Seagram CEO Edgar Bronfman Jr.
Charles Bronfman-related entities accounted for the bulk of the sales. Charles Bronfman trusts sold 3.036 million shares at around $47 each to raise almost $140 million over several days in mid-February, SEC filings showed last month. In late February, he gave notice of intention to sell a few hundred thousand more shares.
Bronfman Associates, a partnership connected with Edgar Bronfman Sr. and his family (including Bronfman Jr.), sold 741,700 shares over the same period for about the same price. Bronfman Sr. also exercised 111,720 employee stock options and sold the resulting shares, the SEC filings showed.
Another 600,000 shares were sold by entities connected with Bronfman Sr.'s sisters, Phyllis Lambert and the late Minda de Gunzburg.
The sales only slightly diminish the family's total holding in Seagram of 114 million shares, or 28.7%. And at least part of the reason for the sales is likely to be the need for liquidity in a family as widely scattered as the Bronfmans, said close observers.
Financial planning
A spokeswoman for Seagram said Thursday the sales were "made as part of the family's financial planning." She added that Edgar Bronfman Sr.'s options had to be exercised because they were about to expire.
But it has been no secret that Charles Bronfman is unhappy with his nephew's 1995 decision to sell Seagram's stake in Du Pont and buy MCA, a deal that cost the company billions of dollars in lost profits as Du Pont stock soared and MCA floundered. Reps for Charles Bronfman were unavailable for comment Thursday.
It has only been in recent months that Seagram stock has begun to move after fluctuating in a narrow range around $35 for several years. Since December, when the Polygram deal was completed, the stock has gradually risen to around $54 earlier this week.
Announcement of Universal Music's Internet joint venture with Bertelsmann two days ago sent the stock shooting up another $10 to a high of $65, although it eased back slightly to close at $61.81.
Theme park enthusiasm
Schroders & Co. analyst Scott Davis said Thursday that part of the reason for the stock rise in recent weeks was enthusiasm about the upcoming opening of Universal's new Florida theme park, Islands of Adventure.
"It's a great park," said Davis, who was among a group of Wall Streeters who visited earlier this week.
Davis noted the Internet excitement reinforced "euphoria" about the park earlier this week.
