Seagram Sells Time Warner Shares

Seagram Co. has sold more than half its remaining stake in Time Warner Inc. for about $965.6 million, as shares of the big media and entertainment company trade near an all-time high.

Montreal-based Seagram, which sells liquor and produces films and music, said it sold the shares for $64.38 per share to investment firm Goldman, Sachs & Co. Seagram sold 15 million shares and retained 11.8 million Time Warner shares, representing a 2.3% stake.

Time Warner shares have risen 67% during the last year, as its cable business improved after the purchase of Turner Broadcasting Systems Inc., and its magazines gained advertising pages. Seagram acquired the shares between 1993 and 1995 after Chief Executive Edgar Bronfman Jr. began taking an interest in Hollywood.

“As we have said before, our position in Time Warner is non-strategic,” Bronfman said in a statement. “Given the continuing strength of the price of Time Warner stock, we believe this was an appropriate time to reduce further the size of our holdings.”

Time Warner has made money in three of the last four quarters, after posting losses for all but one year since 1989. The stock touched an all-time high of $65.81 Wednesday; Time Warner closed at $63.88 Thursday, on the New York Stock Exchange.

Seagram stock has fallen 12% in the last year because it has yet to see much gain from its 1995 acquisition of MCA Inc. and its Universal Pictures unit for $5.7 billion. Seagram shares gained $1.25 on Thursday to close at $35.75 on the NYSE.

It’s also being hurt by the erosion of its liquor business, which faces plunging profits in Asia. In Europe, the liquor business is up against competition from the merger of Grand Metropolitan and Guinness, which created Diageo.

Seagram said it will receive more than $800 million after tax from the sale and use the proceeds for general corporate purposes, including debt repayment.