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Strategies & Market Trends : Value Investing
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To: Michael Burry who wrote (2790)12/18/1997 9:15:00 AM
From: Worswick  Read Replies (3) of 78751
 
Since you are such a good guy Michael I will tell you the absolute true gen about Seagram.

Once upon a time I knew the man who really built the profit center of Seagram. He in fact was their CEO after the demise of the Senior Bronfman. In the 1950's this man urged the senior Bronfman to buy a Texas oil company and get the family into the oil business. The oil company they bought was eventually sold to Marvin Davis and with the proceedes the company tried to buy Conoco and stay in the oil business. Dupont bought Conoco, however, and Seagram wound up with 25% of Dupont... in a swap for the Conoco position amassed by the Bronfman's.

Do you follow this so far?

Now, the important point about Seagrams is that the liquor business is a dying business IMHO. The dividends of Dupont were providing the major profits of Seagram.

So, now what to do it you were a genuis businessman? Edgar, Jr. sells the Dupont position and then buys 80% of Universal. No more dividends from oil companies or Dupont. Dupont goes to a triple in the mkt from where they sold it. Edgar Jr. composes music for Universal movies. The $8 billion Edgar paid for Universal stays about $8 billion. The Dupont position is now worth about $21 billion.

Hope your still here with me.

When I last looked the FAMILYowned something like 40% of Seagram. The reason nothing will ever happen to Seagram is because the FAMILY will never give up control. The stock will always be undervalued. Seagram was Edgar Snr's toy and is now Edgar Jrs. toy.

THIS IS NOT A VALUE STOCK. I'm not sure its even a stock.

NB in financial circles in New York Edgar Jr's. nickname is "Twinkie".
I don't know where he got this name.
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