In response to requests from Plumbing Manufacturers Intl. (PMI) and its members, as well as from other supporters of the U.S....
Media giant Vivendi Universal has sold about 9 percent of its stake in Vivendi Environment SA the world's largest water utility raising nearly $1.1 billion.
The extra cash is a welcome boost for Chairman Jean-Marie Messier's ambitious plans to make a success of the French-American conglomerate's music and media operations amid the troubled economic climate.
Vivendi said it would raise the funds by selling 32.4 million shares in Vivendi Environment at about 38 euros ($34) through a share placement. The company plans to keep its remaining 63 percent holding in its subsidiary and to book a 129 million euros ($115 million) pretax capital gain on the deal this year.
Analysts said the timing of the sale was surprising coming shortly after Vivendi Environment had issued a profit warning and that it showed Vivendi's need for extra funds.
On Friday, the company said operating profit would grow by 7 to 10 percent backtracking from an initially projected growth of 10 percent.
``I'm a bit surprised by the timing of the sale. Environment's stock has tumbled a lot recently,'' said the associate director of Dexia Securities in Paris, Frederic Sauvegrain.
``Vivendi has sold its stake at a relatively low price, around 15 percent lower than it was four days ago, he said, adding ``they clearly need cash.''
U.S. shares of Vivendi Environment were down $1.50, or 4 percent, to $34.50, while shares of Vivendi Universal were up 55 cents, or 1 percent, to $52.06.
Sauvegrain said the move ``shows Vivendi is seemingly switching its focus more toward its media and communications activities.''
Vivendi Universal was formed by the merger last year of Vivendi, a French media and utilities concern, and the Canadian firm Seagram Co., which owned the Universal music and movie studios.
The chairman of Vivendi Environment's board of directors, Henri Proglio, welcomed the deal as good news, saying it would increase the liquidity of the company's stocks in the long run. The sale will ``provide Environment with the means to pursue and accelerate its development plans,'' Proglio said in a statement.