Seagram reduces stake in USA
-- Broadcasting & Cable, 5/8/2000
Seagram Co. reduced its 45% stake in USA Networks by about 2% by letting an option to buy additional shares expire. The purchase was necessary to maintain the stake after USA issued 24 million shares last month to acquire Precision Response Corp. Liberty Media, owned by AT & T and run by John Malone, elected to buy the shares necessary to maintain its 21% stake.
Other major shareholders include Paul Allen, who has a 9% stake through Vulcan Ventures. Barry Diller, chairman of USAi, holds about 10% of the company but maintains control of all voting stock via an agreement with Seagram Chairman Edgar Bronfman. That agreement includes an option for Seagram to repurchase up to 50.1% of USA Networks on the open market.
Seagram's decision coincided with its earnings report for fiscal third quarter 2000, ended March 31. EBIDTA was $285 million on revenues of $3.4 billion, with an operating loss of $1 million, compared with $163 million in 3Q '99. The company reported a net loss of $265 million, or 61 cents a basic share, for the quarter.
