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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: December 10, 1998
THE SEAGRAM COMPANY LTD.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Canada 1-2275 None
(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
1430 Peel Street, Montreal, Quebec, Canada H3A 1S9
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code:
(514) 849-5271
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Item 2. Acquisition or Disposition of Assets.
On December 6, 1998, The Seagram Company Ltd. (the "Corporation")
announced that it had accepted approximately 99.5% of the shares of PolyGram
N.V. ("PolyGram") tendered pursuant to a tender offer (the "Offer") by the
Corporation. The Corporation funded the purchase of the tendered PolyGram shares
on December 10, 1998. Pursuant to the Offer, the Corporation paid approximately
$8.56 billion in cash, exclusive of fees and expenses, and issued approximately
47.9 million common shares (approximately 12 percent of the Corporation's
outstanding common shares after the transaction). Substantially all of the
common shares were issued to Koninklijke Philips Electronics N.V. ("Philips"),
which had owned 75% of the PolyGram shares.
The cash portion of the Offer was partially financed from loans and
dividends from the Corporation's subsidiaries in the amount of $6,188 million
and borrowings of $480 million under the Corporation's US$1,100,000,000 Credit
Agreement dated as of December 21, 1994, as amended and restated as of October
23, 1998, among the Corporation, certain lenders party thereto and Bank of
Montreal, as Administrative Agent. The sources of funds for the subsidiary loans
and dividends were as follows: (i) approximately $533 million through an
offering by Joseph E. Seagram & Sons, Inc., an indirect, wholly-owned subsidiary
of the Corporation ("JES"), of its 8.00% Senior Quarterly Income Debt Securities
due 2038 which are guaranteed by the Corporation, (ii) $3 billion from
borrowings under JES' US$6,500,000,000 Credit Agreement dated as of October 21,
1998 among JES, as borrower, the Corporation and J.E. Seagram Corp., as
guarantors, certain lenders party thereto, The Chase Manhattan Bank, as
administrative agent, Citibank N.A., as syndication agent, and Bank of America
NT&SA and Bank of Montreal, as co-documentation agents, (iii) $1.8 billion in
borrowings under JES' US$2,000,000,000 Credit Agreement dated as of November 23,
1994, as amended and restated as of October 21, 1998, among JES, as borrower,
the Corporation and J.E. Seagram Corp., as guarantors, certain lenders party
thereto, The Chase Manhattan Bank, as administrative agent, Citibank N.A., as
syndication agent, and Bank of America NT&SA and Bank of Montreal, as
co-documentation agents and (iv) $855 million from Galaxy Investors L.L.C.
relating to the sale of certain film rights to Galaxy Investors L.L.C. pursuant
to an arrangement whereby a subsidiary of the Corporation serves as the sole
distributor for such films and has the option to purchase the films at certain
future dates. The balance of the cash portion of the Offer was financed from
cash on hand generated by the Corporation's recent sale of Tropicana Products,
Inc. and the Corporation's global juice business.
The tendered shares of PolyGram are currently held by Centenary Holding
N.V., an entity in which the Corporation has an indirect approximately 91.9%
ownership interest with the remaining approximately 8.1% interest owned
indirectly by Matsushita Electric Industrial Co., Ltd. ("Matsushita"). As part
of the reorganization of PolyGram, certain subsidiaries of PolyGram were
transferred to affiliates of the Corporation for fair market value. Matsushita,
the indirect minority shareholder in Universal Studios Holding I Corp.
("Universal Holding"), an entity which indirectly owns Universal Studios, Inc.,
declined to contribute additional capital in connection with the acquisition of
PolyGram and the reorganization. As a result, the Corporation's ownership of
Universal Holding has increased from approximately 84% to approximately 91.9%.
The terms of the Offer were described in the Offering
Circular/Prospectus dated November 4, 1998 filed in connection with the
Corporation's Registration Statement on Form S-4 (Registration No. 333-61535).
As described in the Offering Circular/Prospectus, the terms of the transaction
were the result of arms-length negotiations among the Corporation, Philips and
PolyGram.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired.
(1) Annual Financial Statements. The audited consolidated balance
sheets of PolyGram as of December 31, 1997 and 1996, and the
related consolidated statements of income, consolidated
statements of cash flows and consolidated statements of
changes to shareholders' equity for each of the three years
ended December 31, 1997 and the report of KPMG Accountants
N.V. thereon are incorporated herein by reference to
PolyGram's Annual Report on Form 20-F for the year ended
December 31, 1997.
(2) Interim Financial Statements. It is impracticable to provide
at this time unaudited interim financial statements of
PolyGram for the nine months ended September 30, 1998 as
required by item 7(a) of Form 8-K. The required interim
financial statements will be filed as soon as practical, but
not later than 60 days after this report on Form 8-K is
required to be filed.
(b) Pro Forma Financial Statements.
(1) Unaudited pro forma consolidated balance sheet as of September
30, 1998 and unaudited pro forma consolidated income statement
for the three months ended September 30, 1998 and the fiscal
year ended June 30, 1998 (incorporated by reference to the
unaudited pro forma financial statements included in the
Corporation's Form 8-K dated December 14, 1998).
(c) Exhibits
(2.1) Offer Agreement dated as of June 21, 1998 among the
Corporation, Philips and PolyGram (incorporated by reference
to Exhibit (2.1) to the Corporation's Current Report on Form
8-K/A dated July 2, 1998).
(2.2) Tender Agreement dated as of June 21, 1998 between the
Corporation and Philips (incorporated by reference from
Exhibit (2.2) to the Corporation's Current Report on Form
8-K/A dated July 2, 1998).
(2.3) Voting Agreement dated June 21, 1998 between the Corporation
and Philips (incorporated by reference from Exhibit (2.3) to
the Corporation's Current Report on Form 8-K dated June 22,
1998).
(10.1) Stockholders Agreement dated as of June 21, 1998 between the
Corporation and Philips (incorporated by reference from
Exhibit (2.1) to the Corporation's Current Report on Form 8-K
dated June 22, 1998).
(23) Consent of KPMG Accountants N.V., independent auditors.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE SEAGRAM COMPANY LTD.
(Registrant)
Date: December 23, 1998
By: /s/ Daniel R. Paladino
Daniel R. Paladino
Executive Vice President,
Legal and Environmental Affairs
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EXHIBIT INDEX
Exhibit
Number Description of Exhibit
(2.1) Offer Agreement dated as of June 21, 1998 among the
Corporation, Philips and PolyGram (incorporated by
reference to Exhibit (2.1) to the Corporation's Current
Report on Form 8-K/A dated July 2, 1998).
(2.2) Tender Agreement dated as of June 21, 1998 between the
Corporation and Philips. (incorporated by reference from
Exhibit (2.2) to the Corporation's Current Report on Form
8-K/A dated July 2, 1998).
(2.3) Voting Agreement dated June 21, 1998 between the
Corporation and Philips. (incorporated by reference from
Exhibit (2.3) to the Corporation's Current Report on Form
8-K dated June 22, 1998).
(10.1) Stockholders Agreement dated as of June 21, 1998 between
the Corporation and Philips. (incorporated by reference
from Exhibit (2.1) to the Corporation's Current Report on
Form 8-K dated June 22, 1998).
(23) Consent of KPMG Accountants N.V., independent auditors.
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EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We consent to incorporation by reference in the Prospectuses constituting part
of the Registration Statement on Form S-4 (333-61535), Registration Statements
on Form S-3 (Numbers 2-99681, 33-42959, 33-42877, 33-67772, 333-4134 and
333-4136 and 333-62921) and the Registration Statements on Form S-8 (Numbers
33-27194, 33-2043, 33-49096, 33-60606, 33-99122 and 333-19059) of The Seagram
Company Ltd. of our Report dated February 11, 1998, relating to the Consolidated
Balance Sheets of PolyGram N.V. as of December 31, 1996 and 1997, and the
related Consolidated Statements of Income, Consolidated Statements of Cash Flows
and Consolidated Statements of Changes in Shareholders' Equity for each of the
years in the three-year period ended December 31, 1997 of PolyGram N.V.,
appearing in the Annual Report on Form 20-F of PolyGram N.V. for the year ended
December 31, 1997.
/s/ KPMG Accountants N.V.
KPMG Accountants N.V.
Amsterdam, The Netherlands
December 22, 1998
