Question: In this Discussion, you will explore issues that arise in mergers, acquisitions, and publicly traded stock transactions.
Post a 250-300 word response to the following Discussion prompt. Ensure that your response answers all parts of the question and is supported by both in-text citations and a reference list.
Edgar Bronfman, Jr., dropped out of high school to go to Hollywood and write songs and produce movies. Eventually, he left Hollywood to work in the family business — the Bronfmans owned 36 % of Seagram Co., a liquor and beverage conglomerate.
Promoted to president of the company at the age of 32, Bronfman seized a second chance to live his dream. Seagram received 70 % of its earnings from its 24 % ownership of DuPont Co. Bronfman sold this stock at less than market value to purchase (at an inflated price) 80 % of MCA, a movie and music company that had been a financial disaster for its prior owners. Some observers thought Bronfman had gone Hollywood; others thought that he had gone crazy.
After the deal was announced, the price of Seagram shares fell 18 %. Was there anything Seagram shareholders could do to prevent what to them was not a dream but a nightmare? What legal and ethical obligations does he owe Seagram’s shareholders? Was Bronfman required to get shareholder approval of the sale of DuPont stock? For the purchase of MCA?