Seagram denies media giant bid: Drinks group amasses almost 15% stake in Time Warner

SEAGRAM'S new chief executive, Edgar Bronfman Jr, ruled out a takeover bid for Time Warner yesterday, despite his company's accumulation of shares in the entertainment giant.

In a speech before Seagram's annual meeting in Montreal, Mr Bronfman - who succeeds his father at the head of the drinks group - said recent media speculation about a hostile bid for Time Warner was baseless and inaccurate. Seagram has been buying shares in Time Warner for the past year, amassing a stake now worth dollars 2.25bn ( pounds 1.5bn), or just under 15 per cent of the company.

The stake-building prompted Time Warner's directors to adopt a poison pill plan in January that would be triggered if any outsider held more than 15 per cent.

But Mr Bronfman Jr said after the meeting that Seagram had no plans to either take its investment over the 15 per cent threshold or to seek representation on the Time Warner board. He said Time Warner was an extremely well-run company, congratulating chief executive Gerald Levin for doing an outstanding job managing the sprawling media giant.

Media speculation had created wholly unwarranted concerns about a dollars 25bn takeover bid that had depressed Seagram's shares, he said. Seagram was investing in Time Warner because it was uniquely positioned in the fastest growing industry in North America, Mr Bronfman said.

Analysts said Mr Bronfman's comments appeared to rule out not only a takeover attempt but also a profit-accounting arrangement, such as Seagram enjoys with Dupont. Because it owns more than 20 per cent of the chemicals group it is able to claim a share of Dupont's profits as its own.

Mr Bronfman said the Dupont stake should not be regarded as a blueprint for the investment in Time Warner.

Time Warner shares fell 7 8 to 38 on the news, while Seagram's rose 3 8 to 30.