Time poised with poison for Seagram

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TIME WARNER, the US media conglomerate, adopted a 'poison pill' yesterday, reacting to yet another big purchase of its shares by Seagram, North America's largest drinks group, writes Larry Black.

The 'shareholders' rights plan' - which Time Warner said it developed at the urging of institutional and strategic investors - would award share options to existing holders if any party acquired more than 15 per cent of its shares, making it prohibitively expensive for a hostile bidder to take control.

Seagram said on Wednesday that it had purchased another 5 million Time Warner shares since the beginning of the year, raising its total holding to 11.7 per cent from 10.4 per cent. Seagram has been accumulating the stake - now worth more than dollars 1.7bn ( pounds 1.16bn) - since last May, saying it intended to buy up to 15 per cent, but insisting the purchases were 'solely for investment purposes'.

Time Warner shares closed up dollars 1 at dollars 40.125.