Vivendi Sells 9% of Its Water Utility Unit

PARIS — Media giant Vivendi Universal said Tuesday that it had sold about 9% of its stake in Vivendi Environment, 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.

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%--backtracking from an initially projected growth of 10%.

“I’m a bit surprised by the timing of the sale. Environment’s stock has tumbled a lot recently,” said Frederic Sauvegrain, associate director of Dexia Securities in Paris. Vivendi has sold its stake at around 15% lower than it was four days ago, he said, adding, “They clearly need cash.”

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.

Vivendi shares rose $1.19 to $52.85 on the New York Stock Exchange.