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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-6
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
November 6, 2000
THE FOLLOWING IS A LETTER TO THE SHAREHOLDERS OF THE SEAGRAM COMPANY LTD.
DISTRIBUTED WITH THE ANNUAL REPORT OF THE SEAGRAM COMPANY LTD. FOR THE FISCAL
YEAR ENDED JUNE 30, 2000.
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These materials may contain 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 these materials also address the
strategic business combination of Vivendi, Seagram and Canal+. 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,
Seagram and Canal+ businesses will not be integrated successfully; costs related
to the business combination; failure of the Vivendi, Seagram or Canal+
shareholders to approve the business combination; the risk that Seagram will be
unable to effect the disposition of its Spirits and Wine business or effect such
disposition on satisfactory terms and conditions; 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; and the inability to establish and maintain
relationships with commerce, advertising, marketing, technology and content
providers. None of Vivendi, Seagram or Canal+ undertakes any obligation to
provide updates or to revise any forward-looking statements.
Investors and security holders are urged to read the joint proxy
statement/prospectus regarding the strategic business combination transaction,
which each of Vivendi Universal and Seagram has filed with the U.S. Securities
and Exchange Commission, because it contains important information. Investors
and security holders may obtain a free copy of the joint proxy
statement/prospectus and other documents filed by Vivendi Universal, Vivendi,
Seagram and Canal+ with the Commission at the Commission's website 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 proxy
statement/prospectus.
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TO OUR SHAREHOLDERS:
Even as we report to you on Seagram's strong fiscal year 2000 performance, we
are in the process of executing a transaction that will complete our
transformation into a global entertainment, media and communications company. On
June 20, 2000, Vivendi S.A., Seagram and Canal+ S.A. announced a strategic
combination to create Vivendi Universal - a company that is positioned to
develop and deliver high-quality content and services globally, to consumers in
any place, at any time, and across all platforms and devices.
Vivendi Universal has strong growth prospects that will be driven by consumer
demand for customized, quality content in every form. In this new generation of
Internet services, we believe consumers will be liberated from their PCs by the
proliferation of wireless Internet delivery, and they will seek new means of
making their lives easier, more exciting and rich with personalized information
and entertainment. Vivendi Universal is poised to enter the market to serve this
demanding new consumer by creating, aggregating and distributing compelling
content and services.
2000 PERFORMANCE HIGHLIGHTS
Our fiscal year 2000 results illustrate the strength we bring to this
combination: our earnings before interest, taxes, depreciation and amortization
(EBITDA) increased 27 percent to $1.872 billion, and our 2000 revenues grew by 2
percent, for fiscal 2000 versus 1999's pro forma results. Our reported operating
income was $753 million, compared with last year's loss of $250 million, which
included a $405 million restructuring charge associated with the integration of
Universal Music and PolyGram.
Results from all of Seagram's businesses - Music, Filmed Entertainment,
Recreation and Other, and Spirits and Wine - contributed to this strong
performance.
In particular, we are very proud and pleased with the continued strong
performance of our Spirits and Wine business. Throughout nearly eight
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decades, Seagram's Spirits and Wine business has had a tradition of quality and
excellence, establishing itself as a premier business in its industry.
Beyond performance, our pride in the group is grounded in the great brands it
has developed, the strength of its global distribution network and the
dedication of its creative and talented employees.
The record of strength of our Spirits and Wine business throughout its history
has been the foundation upon which we have created the growth platform for the
future of our company, and it remains a source of great pride and satisfaction
for each of us.
THE INTERNET AGE MEANS CONSUMERS ARE WINNERS
In every aspect of our media and entertainment businesses, we recognize that the
next generation of the Internet will give consumers even greater control over
their universe. New devices integrating interactive voice, audio, video and data
will let consumers create their own worlds, not just their own Web sites.
We believe that in this next generation of the Internet, consumers will have at
their fingertips exactly the information, entertainment, and other content they
want, when and wherever they want it.
We expect Vivendi Universal to create greater value and growth prospects for all
our shareholders. The new company has the potential of increasing annual EBITDA
to more than $4 billion in calendar year 2000 for the media and communications
businesses, with strong growth expected between 2000 and 2002. Cost synergies,
due to consolidations in a number of areas - including purchasing, distribution,
corporate services and information technology - are expected to total more than
400 million euros beginning in 2002.
Vivendi, Universal and Canal+ share a deep understanding of the ways in which
people entertain and inform themselves. From the instant appeal of a hot new
Universal Music Group artist, to the fine theatrical releases and television
programming produced by Canal+ and our own Universal, to the best-selling texts
and software-based games of Havas, these corporate entities understand the
distinctive spirit that feeds creative businesses.
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DELIVERING CONTENT TO THE CONSUMER: DISTRIBUTION AND AGGREGATION
While the creative spirit is at its heart, the new company will also have an
extensive global distribution footprint. Vivendi is well along in the process of
establishing the wireless infrastructure in Europe that will drive the next
generation of access. Anyone who visits or works in Europe knows that it far
outstrips the United States in the ubiquity and quality of cellular telephony.
And the same already applies to mobile devices that combine the attributes of
phones, pagers and PDAs (personal digital assistants).
This growth is expected to continue throughout Europe, Asia and Latin America,
and to accelerate soon in the United States. Industry experts predict the
Wireless Application Protocol (WAP) market in the U.S. and Western Europe
combined will reach 400 million by 2003 and that wireless data usage will
eventually exceed voice usage.
Vivendi Universal plans to secure its place in these rapidly growing markets by
establishing a vital link to the individual consumer. Together with its partner
Vodafone, Vivendi has launched Vizzavi, which is a multi-access portal giving
users access to all Web and WAP services on mobile phone screens - anywhere, any
time. Vizzavi will be available to all subscribers of Cegetel, Canal+, and
Vodafone as the default home page for their combined 80 million mobile phone,
PC, TV, and PDA subscriptions.
Vizzavi France, which was launched in June 2000, offers nearly 200 exclusive
services. The services are grouped into eight categories: news, sports, finance,
recreation, games, travel, helpful hints, and consumer forum. It also provides
such core services as weather, traffic, current film listings, wine information,
recipes of the day and transmission of musical dedications and e-greeting cards.
Vizzavi aggregates the full future potential of this strategic combination.
Right from the start, however, there are powerful possibilities in each segment
of our combined business.
POTENTIAL OF THE WHOLE: GREATER THAN THE SUM OF THE PARTS
In MUSIC, the Internet is making it possible to significantly expand the
recorded music market by offering an enhanced customer experience.
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The ability to sell more to segmented and targeted audiences - facilitating
impulse and specialized buying, providing new opportunities for marketing
and promotion, and selling enhanced products in new packaged formats with
appropriate pricing - requires a range of popular artists, both global and
indigenous. As the world's music leader, Universal Music Group will be an
enormous asset for the new combined company.
In FILMED ENTERTAINMENT, the combination of Universal Pictures and Canal+
will create one of the largest film libraries in the world, with
approximately 9,000 films. This collection is expected to be an important
source of cash flow and revenue growth, as the demand for access to filmed
content grows. The new company will have a secure supply of films for all
of its distribution outlets, as well as the ability to market and promote
new films across its worldwide installed subscriber base. It will also own
the only Europe-based studio with controlled distribution.
In TELEVISION, Vivendi Universal will have a vertically integrated global
television sales, network and production operation with more than 24
million subscribers in more than 180 countries. It will also have a library
of more than 27,000 television episodes. Moreover, through Canal+, Vivendi
Universal will own Europe's leading pay television company, with more than
14 million subscriptions in 11 European countries. Canal+ is also a top
theme-channel producer, as well as a movie and television production
company that owns the world's third-largest television and movie library.
In addition, Vivendi Universal will have a 43-percent effective equity
interest in USA Networks, which includes USA Network, SCI FI Channel, Home
Shopping Network, TicketMaster, Hotel Reservations Network, Gramercy
Pictures and October Films.
In RECREATION, Universal is one of the world's leading theme park
operators, offering consumers an exhilarating vacation experience by
bringing the wide range of Universal's entertainment content to life.
Universal's Recreation Group operates Universal Studios Hollywood,
Universal Orlando, Universal Studios Port Aventura in Barcelona, Spain, and
Universal Studios Experience-Beijing. In April 2000, the company doubled
the size of CityWalk at Universal Studios Hollywood, adding more than 30
new entertainment, dining and retail venues. Universal's 1999 expansion in
Orlando opened to exceptional reviews and
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Universal's new theme park in Osaka, Japan, is on schedule to open in
Spring 2001.
In PUBLISHING, Vivendi Universal will offer several highly desirable forms
of content to feed the Internet demand for value-added, consumer and
business-to-business information and entertainment. Havas is the #1
European publisher overall and the #1 publisher of PC-based games in the
U.S., and #2 worldwide. Diablo(TM) II, which Havas launched in July 2000,
became one of the fastest-selling computer games ever, with one million
copies sold the first two weeks of its debut. Havas also has strong
positions in health, business and local information, with approximately
five million subscribers. The combination of Havas' significant digitized
content - along with Universal's position in console-based games, such as
Crash Bandicoot and Spyro the Dragon - should allow the new company to
create the strong verticals supported by community, chat and other
e-services that drive consumer demand.
In SPORTS, the demand for programming and information is strong, as
proliferating access formats feed the growing demand of sports fans
everywhere. Through Canal+, Vivendi Universal will have extensive sports
programming throughout Europe, including soccer, American football, rugby,
hockey, NBA basketball and boxing.
In DISTRIBUTION, Vivendi's leading position in Europe is a consequence of
relationships in several key sectors that will benefit the combined entity.
Vivendi holds a 44-percent interest in Cegetel, France's leading private
telecommunications operator with operations in five other European
countries. Cegetel's total subscriber base is more than 12 million.
Together with its Canal+ subscribers and its joint venture with Vodafone,
Vivendi has almost 80 million subscriptions across Europe. Vivendi also
holds a 23-percent stake in BskyB (British Sky Broadcasting), which, under
the terms of undertakings made with the European Commission, will be sold
over a two-year time frame. Proceeds from the sale will offer Vivendi
Universal significant additional capital for investment.
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IN CONCLUSION
Over the past five years, we have transformed Seagram into a company with clear
potential to thrive into the next century and to deliver a superior return to
its shareholders. In doing so, we have created significant shareholder value as
a result of redefining our company and our asset base. It has been, at times, a
difficult transition, and we would like to thank our shareholders for their
steadfast encouragement and support.
Throughout our transition, Robert W. Matschullat has served as our Vice-Chairman
and Chief Financial Officer. In October 1999, he announced he would relinquish
those titles in order to pursue other opportunities. We would like to take this
opportunity to acknowledge the significant role he played in bringing about
Seagram's transformation, and to express our gratitude for his many important
and valuable contributions.
We also want to express our deepest appreciation to our directors for
their dedication, wisdom, diligence and hard work. Over the past five years in
particular, our directors have demonstrated their willingness to confront major
challenges, to apply reason and order to a sometimes complex transition, and to
hew to the strength of their convictions. For their tireless attention and their
constant intelligence, we are in their debt.
Our extraordinary group of employees around the world, some of the finest people
to be found anywhere, has managed and grown our Company through this period of
enormous change. Their work and their ability have allowed our Company to make
the progress we have. We are grateful to them, and salute them for their loyalty
to our company, for their belief in our vision, and for the skill and dedication
they bring to Seagram each and every day of their professional lives.
In addition, we have had a long and happy association with suppliers,
distributors, retailers and all those connected with the Spirits and Wine
business these many years. We cherish the strong relationships that have been
such an important part of our growth and success over time. This network of
people has contributed greatly to the industry it serves.
Finally, we are proud to be members of the family that has led this great
Company for the past eight decades. Our family's support, its deep concern for
our employees, and its patience in allowing us to always
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pursue the long-term interests of all shareholders is a constant source of
pride. Their integrity and goodwill have been an integral and indispensable part
of the Seagram story.
We are about to begin a new chapter in that remarkable story, and we hope you
share our enthusiasm for a very bright future.
Sincerely,
/s/ Edgar M. Bronfman /s/ Charles R. Bronfman /s/ Edgar Bronfman, Jr.
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Edgar M. Bronfman Charles R. Bronfman Edgar Bronfman, Jr.
Chairman Co-Chairman President, Chief
Executive Officer
