How does the old song go? "Come closer now/ So I can see you in the dark/ . Hold on to me/ . And tell the things that no one else would say/ . And I love to hear your voice sayin' it's all right."
That 1985 Dionne Warwick ballad, Whisper in the Dark, summons up the erotic appeal of the unknown. And now the man who wrote its lyrics, Edgar Bronfman Jr., is coming closer to possessing something he has desired for most of his 39 years: a Hollywood studio. Last week Bronfman, the president and chief executive officer of Seagram Co., was deep in negotiations with Japan's Matsushita Electric Industrial to take control of MCA, which owns record labels, theme parks, TV shows, a pleasant parcel of Southern California real estate-and Universal Studios. Seagram, the Canadian purveyor of whiskey, wine and Tropicana juices, was reportedly offering about $5.6 billion for 80% of the entertainment conglomerate.
At week's end, many guesses and questions shrouded the negotiations. The two companies were insisting that "there is no assurance an agreement will be reached." But if the deal does fly, Matsushita will have escaped from a nettlesome marriage, though at a steep price (about a 35% loss on the original investment, owing mostly to the weakness of the dollar vs. the yen). And Bronfman, the wandering son who officially took over the family business only last year, will invest his shareholders' money so he can realize his dream. He will ascend from mere billionaire status to a more glamorous title: moviemaker.
Already Bronfman has earned the title of mischiefmaker. His sorties are tilting the fortunes of several prominent companies-not just Matsushita, MCA and his own but also Du Pont, Time Warner and infant multimedia outfit DreamWorks SKG. Last week, for $8.8 billion, the chemical giant bought back most of Seagram's 24.1% of Du Pont stock. Time Warner, of which Seagram owns a provocative 14.9%, braced for a messy stock scramble should Bronfman sell his shares. DreamWorks also looked to the shy, dapper mogul for indications that he would retain MCA's current, embattled management and thus be in line to distribute the new company's movies and CDs.
Entertainment executives saw MCA as a smart buy for the 21st century: surely there are rosier prospects for software than for spirits. But Bronfman wasn't selling his whiskey interests; he was giving up on a company with a strong present (Du Pont stock accounted for nearly 70% of Seagram's pretax profits last year) and a robust future. Unsurprisingly, Wall Street greeted both the Du Pont sale and the MCA negotiations with derision. On Friday Moody's Investors Service announced that it was considering "the possible downgrade" of Seagram's debt. Seagram stock dropped nearly 17% during the week, closing Friday at 26 1/2. Wall Street speculators signaled that they liked only one scenario: that an investor buying Bronfman's block of shares could set off a contest for Time Warner. Rumors that General Electric's Jack Welch could be the buyer helped send Time Warner's stock up more than 3% on Friday, closing at 38 1/4.