Window Shopping with $3 Billion

Seagram's Bronfman looks for a way to spend his oil profits

Surrounded in his office on the fifth floor of the Seagram Building on Manhattan's Park Avenue by Rodin sculptures and a tapestry by Miro, Edgar Bronfman, 51, the wavy-haired chairman of Seagram Co. Ltd., exudes a certain air of contentment. He should. Last year Bronfman sold the Texas Pacific Oil Co., which Seagram had bought in 1963 for $256 million, to the Sun Co., for $2.3 billion. Bronfman's nest egg has since grown to a stunning $3 billion through shrewd asset management, and he is now leisurely looking for a place to invest the money. Says he: "It's a little like matchmaking. There are a lot of willing brides, but the boy has still to make up his mind."

The last bride Bronfman sought was not only unwilling but downright antagonistic. In March Seagram offered $2 billion for St. Joe Minerals Corp., the nation's largest lead producer. At $45 a share, almost three times St. Joe's book value, the bid seemed generous. But John Duncan, St. Joe's crusty chairman, announced that he would rather liquidate the company than sell it to Bronfman. Duncan would not even return Bronfman's phone calls. The Fluor Corp., a giant (1980 sales: $4.8 billion) construction firm, then topped Seagram's bid by $15 a share. Rather than start a costly, and probably futile, bidding war, Seagram dropped its offer earlier this month.

Since then, Seagram has been deluged with proposals about how to spend its $3 billion. "We get a lot of calls from crackpots with ideas, though only a few friends get through to me," Bronfman told TIME Correspondent Frederick Ungeheuer last week. One intrepid inventor, for example, suggested that some of the money be given to him to pay for marketing a method for freeze-dried taxidermy. A real estate firm offered Bronfman New York City's World Trade Center, which may be placed on the market for $1.1 billion.

Seagram was founded by Samuel Bronfman, Edgar's father, who was the son of a Manitoba, Canada, frontier hotel owner. In 1925 he set up a modest whisky distillery in Montreal. The company profited enormously during U.S. Prohibition, when rumrunners smuggled Seagram's whisky to a thirsty market in the U.S. Since 1947 the company has been the world's largest distiller. Edgar succeeded his father as head of the company in 1971.

Today Seagram sells $2.5 billion worth of alcoholic beverages annually; 70% of that goes to the U.S. But sales of its two top brands, Seven Crown and V.O. Canadian whisky, have slipped in recent years as the American public has switched to lighter drinks and wine. Bacardi rum has displaced Seven Crown as the country's bestselling brand.

A team of Seagram executives, including Bronfman's brother Charles, the chairman of the firm's executive committee, is now screening the business offers the company receives. So far, only corporations in the steel, atomic energy, pulp and paper industries have been declared unsuitable matches. Bronfman suggests he might buy two or three smaller companies based in North America that have foreign operations. This time around, however, he is more likely to try for a friendly takeover than risk a pre-emptive bid of the St. Joe variety. Some Wall Street analysts believe Seagram would be wise to use its money to buy a consumer products company like Gillette or Colgate-Palmolive, which would make the best use of its marketing experience.

Bronfman, for now, is just quietly waiting. After all, he is earning $60 million in quarterly interest on the bundle of cash. Mindful of his own experience at art auctions, the sometimes impulsive Bronfman will tread carefully. Says he: "I do not want to wake up one night and say, 'My God, why did I buy that!' "

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