Vivendi gathers strength from sales

Vivendi Universal last night signalled its exit from its traditional utilities business after 150 years in a move which could strengthen its hand in its battle with Vodafone for control of phone group Cegetel.

It said it had appointed investment bankers to find buyers for half its remaining 40% stake in its former water to waste management subsidiary, Vivendi Environnement, and would grant options to the buyers over its remaining stake.

The group also announced that it had sold its US publishing business Houghton Mifflin for $1.66bn (£1bn) - close to the expected asking price.

According to Vivendi, the deals will bring the amount it has raised from asset disposals to some €7bn (£4.5bn) by the end of this year and €16bn by the end of next year.

The asset sales could prove vital to Vivendi's hopes of being able to put together a deal to buy the €4bn BT stake in Cegetel which would allow it to snatch control of the French telecoms firm from Vodafone.

The British company has already reached agreement with the BT and another Cegetel shareholder, SBC, to buy their stakes but Vivendi can pre-empt the offer until December 10. Vodafone has also renewed its offer to buy Vivendi's own 44% stake in Cegetel and Vivendi has been under pressure to accept the offer to cut its heavy debt burden.

However, a sale of the utility company shares could give it a breathing space in which to either trump the Vodafone bid or force the British group to raise its terms.