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Filed by The Seagram Company Ltd.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Subject Company: The Seagram Company Ltd.
Commission File No. 1-2275
and
Subject Company: Canal Plus S.A.
Commission File No. 82-2270
Date: July 14, 2000
This filing contains forward-looking statements within the meaning of the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995.
These statements are based on management's current expectations or beliefs and
are subject to a number of factors and uncertainties that could cause actual
results to differ materially from those described in the forward-looking
statements. The forward-looking statements contained in this filing address the
following subjects: future financial and operating results and strategic plans
of the combined company.
The following factors, among others, could cause actual results to differ
materially from those described in the forward-looking statements: the risk
that the Vivendi, Canal+ and Seagram businesses will not be integrated
successfully; costs related to the business combination; failure of the
Vivendi, Canal+ or Seagram stockholders to approve the business combination;
inability to further identify, develop and achieve success for new products,
services and technologies; increased competition and its effect on pricing,
spending, third-party relationships and revenues; inability to establish and
maintain relationships with commerce, advertising, marketing, technology and
content providers.
Investors and security holders are urged to read the joint proxy
statement/prospectus regarding the proposed strategic business combination
referenced in the foregoing information, when it becomes available, because it
will contain important information. The joint proxy statement/prospectus will
be filed with the Securities and Exchange Commission by Vivendi, Canal+ and
Seagram. Investors and security holders may obtain a free copy of the joint
proxy statement/prospectus (when it is available) and other documents filed by
Vivendi, Canal+ and Seagram with the Commission at the Commission's web site at
www.sec.gov. The joint proxy statement/prospectus and these other documents may
also be obtained for free from Seagram. Information regarding the participants
in the proxy solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, is contained in the joint press
release relating to the transaction filed with the Commission by each of
Vivendi and Seagram on June 20, 2000.
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THE FOLLOWING ARE QUESTIONS FROM EMPLOYEES OF THE SEAGRAM COMPANY LTD. AND
ANSWERS FROM JOHN D. BORGIA, EXECUTIVE VICE PRESIDENT, HUMAN RESOURCES,
DISSEMINATED OVER THE INTRANET OF THE SEAGRAM COMPANY LTD.
WE KEEP HEARING ABOUT THE MERGER NOT BEING DRIVEN BY COST SAVINGS, YET THE
MESSAGE THAT VIVENDI UNIVERSAL WILL ACHIEVE US$400 MILLION IN COST SAVINGS
COMES OUT. WHAT WILL BE THE SOURCE OF THESE COST SAVINGS? WILL THEY BE THROUGH
JOB ELIMINATIONS?
John Borgia: The US$400 million cost savings goal by 2001 is the publicly stated
projection by Vivendi. As with any merger, there will be some overlap in some
functions within the organizations that may result in some redundancies and job
eliminations. However, it has been pointed out that in general there is little
overlap in merging the Vivendi Universal businesses.
Edgar Bronfman, Jr. has said: "This is not a merger about cost savings. This is
not a merger about eliminating masses of operations. This is a merger about
joining complementary businesses and services together to create a larger, more
effective, more competitive and ultimately more profitable whole."
Vivendi CEO Jean-Marie Messier has stated: "This is not a merger ... whose
success is going to be based on cost savings and on loss of jobs." He
identified three areas for potential cost savings: purchasing, IT and logistics
(distribution).
WILL THE SSWG EXECUTIVE MANAGEMENT GROUP BE CONSULTED WHEN THE OPTIONS FOR
DIVESTING OUR SPIRITS AND WINE BUSINESS ARE CONSIDERED?
John Borgia: Yes. The SSWG EMG will be consulted, and in fact, are beginning to
evaluate the various options available right now.
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IS THERE A GUARANTEED PRICE FOR MY SEAGRAM SHARES OR STOCK OPTIONS? IF NOT, HOW
WILL THE PRICE BE DETERMINED? WHAT IS THE "COLLAR"?
John Borgia: The merger agreement with Vivendi does not guarantee a price for
Seagram shares or options, whether held by employees or other shareholders.
Seagram shares will be automatically converted at the closing of the
transaction into Vivendi Universal shares (or, in the case of Canadian
residents who so elect, an equivalent number of exchangeable shares of a
Vivendi Universal subsidiary having substantially the same rights as Vivendi
Universal shares) and Seagram options will be automatically converted at the
closing into Vivendi Universal options.
The number of Vivendi Universal shares that will be received for each Seagram
share (and the number of Vivendi Universal shares that will be issuable upon
exercise of a Vivendi Universal option received at the closing upon the
conversion of an option to acquire one Seagram share) will be equal to an
"exchange ratio" determined based upon the average closing price of Vivendi
shares during a 20-trading day period ending three trading days prior to the
closing. While the provisions are a bit complex, there are only three possible
scenarios:
If the price of Vivendi shares is between US$96.69 to US$124.34
In this price range - known as "within the collar" - the exchange ratio will be
set so that each Seagram share is converted into Vivendi Universal shares
having a value of US$77.35 (and each option to acquire one Seagram share is
converted into an option to acquire Vivendi Universal shares having a value of
US$77.35), based upon such average closing price of Vivendi shares.
For example, if the average closing price for Vivendi shares during the 20-day
trading period is US$100, the exchange ratio will be set at 0.7735, meaning
that each Seagram share will be converted into 0.7735 Vivendi
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Universal shares (and each option to acquire one Seagram share will be
converted into an option to acquire 0.7735 Vivendi Universal shares).
Likewise, if the average closing price for Vivendi shares during the 20-day
trading period is US$110, the exchange ratio will be set at 0.7032, so that
each Seagram share will be converted into 0.7032 Vivendi Universal shares
(which once again would have a value of US$77.35, based upon such average
closing price of Vivendi shares).
If the price of Vivendi shares equals or exceeds US$124.34
In this event, the exchange ratio always will be set at 0.6221, meaning that
each Seagram share will be converted into 0.6221 Vivendi Universal shares (and
each option to acquire one Seagram share will be converted into an option to
acquire 0.6221 Vivendi Universal shares).
For example, if the average closing price for Vivendi shares during the 20-day
trading period is US$130, the exchange ratio will result in each Seagram share
being converted into 0.6221 Vivendi Universal shares having a value of 0.6221
times US$130, or US$80.87.
If the price of Vivendi shares equals or is less than US$96.69
In this event, the exchange ratio always will be set at 0.8, meaning that each
Seagram share will be converted into 0.8 Vivendi Universal shares (and each
option to acquire one Seagram share will be converted into an option to acquire
0.8 Vivendi Universal shares).
For example, if the average closing price for Vivendi shares during the 20-day
trading period is US$90, this exchange ratio will result in each Seagram share
being converted into 0.8 Vivendi Universal shares having a value of 0.8 times
US$90, or US$72.
Two additional points need to be kept in mind:
Since the price that will be used to determine the exchange ratio will be the
average closing price of Vivendi shares over the 20-trading-day period ending
three trading days prior to the closing, the actual value of Vivendi Universal
shares received at closing may be greater or less than the price used to
determine the exchange ratio.
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Following the closing, the actual value of the Vivendi Universal shares
received in the transaction (and the value of the Vivendi Universal shares for
which Vivendi Universal options received in the transaction may be exercised)
will vary over time based not only on market fluctuations but also on
fluctuations in the exchange rate from Euros to U.S. dollars.
WILL OUR THEME PARKS BUSINESS BE SOLD?
John Borgia: No. Vivendi CEO Jean-Marie Messier made that clear in his remarks
at the recent Universal Studios Town Hall Meeting. Jean-Marie said: "Theme parks
are always strategic and are core to Vivendi Universal." He called theme parks a
"good business" and one in which we are "tremendously efficient" and
"profitable." In addition, he said, "Theme parks are so much linked to Universal
Studios."
IS SPENCER GIFTS CONSIDERED A "NON-CORE" BUSINESS?
John Borgia: No. Let me quote Edgar from the recent Universal Studios Town Hall
Meeting: "Spencer Gifts is a business which in some ways doesn't naturally fit
into the entertainment business, and we took a hard look at Spencer Gifts to
try to make a determination . . . as to whether or not it was a core business.
Frankly, because the management there is so good, because it gives us the
opportunity to interface directly with customers at retail, because it's a
great source of information, and because we believe that as an online business
it has a great opportunity to grow . . ., it is a core business for Universal.
We do intend to hold onto it, and we look forward to having Spencer Gifts as
part of the Vivendi Universal family for many years to come."
