Seagram’s Key Player in Time Warner Buy

One of the great guessing games on Wall Street these days is whether Seagram Co. will turn out to be a friend or foe to Time Warner management after revealing that it plans to buy as much as 15% of the entertainment giant. But one thing that’s already certain is that Seagram President Edgar M. Bronfman Jr. won’t have to look far for guidance.

Stephen E. Banner, Seagram’s chief financial officer, was involved in two of the biggest entertainment plays of the last decade as a leading merger and acquisitions lawyer before joining Seagram in 1991. He also has longstanding ties to such industry heavyweights as Paramount Communications Chairman Martin S. Davis and Creative Artists Agency Chairman Michael Ovitz.

Time Warner executives got to know Banner in 1989 when he helped Paramount launch a hostile bid for Time Inc. As the company’s outside counsel, Banner was one of the top advisers to Davis in what became the biggest takeover battle in the history of the entertainment business.

The Time/Warner Communications merger went through after Paramount’s bid failed. But Banner was back in the saddle one year later as the senior attorney for Japan’s Matsushita Electric Industrial Co. in its $6.59-billion acquisition of MCA Inc.

He headed a team of 35 Simpson Thacher & Bartlett attorneys in the deal, which was nearly derailed several times.

“When things got sticky, he was as cool as they get,” said one executive who worked alongside Banner. “You don’t judge people in good times. You judge them under stress, and that’s where Banner excels.”

Banner’s clients outside the entertainment industry included Seagram and NCR, which he advised when it was sold to AT&T; in 1991. Seagram persuaded him to come aboard just after the Matsushita-MCA deal was sealed.

As a board member and chief financial officer, sources say, Banner significantly influenced Bronfman’s move on Time Warner. The two spent as much as a year going over their options before investing $702 million in the entertainment conglomerate, largely because of its technology assets. One of the other companies closely considered was Paramount.

Edgar M. Masinter, a Simpson Thacher partner who worked closely with Banner, said the Bronfman family, which runs Seagram, has considerable faith in the attorney based on his years as the company’s outside counsel. Masinter described Banner’s role in shaping company strategy as “intimate.”

Banner, known for being intensely private, declined comment. The biography provided by Seagram would fit on the front of a business card, even though the 54-year-old lawyer’s considerable credentials include magna cum laude degrees from Yale University and Harvard Law School and a 23-year stint at Simpson Thacher.

Banner’s friends are equally protective, tending to offer up generic platitudes in place of meaningful insights. One calls him a “brilliant tactician,” another a “classic family man” with a vacation home in the Berkshires who is especially proud of the fact that his son Stuart clerked for U.S. Supreme Court Justice Sandra Day O’Connor. A third confides that Banner is “a regular, fun guy but a little nerdy.” A fourth calls him a “workaholic.”

“He hasn’t got a secret life,” said John L. Weinberg, senior partner at Goldman, Sachs and a close friend. “This is a professional. If you were running the company, you would want him as your adviser. If I were running the company, I would want him as my adviser too.”

Where Banner will advise the company to go with Time Warner only he and a few other people know. Weinberg insists it’s strictly a passive investment and that anyone who says otherwise is “paranoid.” Martin Romm, an analyst who follows Seagram for First Boston, agrees.

“They are first and foremost a beverage company,” Romm said. “After that, they have investments in some very strategic companies, such as Time Warner and DuPont. It’s no more complicated than that.”

But there are others who see Banner’s past as prelude. “Stay tuned,” says one. “This is only going to get more interesting.”

EVANS, THE SEQUEL: Robert Evans, who produced “Sliver,” says he’s been treated unfairly in stories, including last Friday’s Biz column that named him as a defendant in a class-action fraud suit. In a statement, Evans says he was “thrown into the melee” by the plaintiffs’ lawyers “for the publicity value of his name and not for any wrongdoing.” The Los Angeles Superior Court case links Evans to an alleged scheme to defraud private investors of as much as $200 million. According to court documents in the case, Evans’ Axiom Entertainment was one of more than a dozen companies that benefited from the operation. Evans says he never owned or controlled Axiom.