Liberty Media May Sell Part of Stake in Vivendi

In another sign of investor unease with Vivendi Universal, the French entertainment giant said that Liberty Media Corp., one of its major shareholders, may scale back its investment in the company.

Vivendi disclosed in a filing Monday with the Securities and Exchange Commission that Liberty Media, the Englewood, Colo.-based cable TV company headed by billionaire John Malone, may sell part of its 3.5% Vivendi stake in the next two years.

Liberty joins two other top investors in Vivendi Universal--Saint-Gobain and Royal Philips --that have indicated in recent months that they may sell stock in the company.

Vivendi’s largest shareholder, the Bronfman family, which is unhappy over a 46% decline in its holdings this year, has said it is reviewing its 5.3% stake in the company.

Any pullback by Liberty and other top investors would only complicate efforts by battered Vivendi Chief Executive Jean-Marie Messier to rebuild investor confidence in the company.

The Paris company’s stock has fallen this year because of concerns about the company’s direction and heavy debts from a spate of acquisitions, including Universal Studios.

Last week Messier emerged from a marathon meeting with frustrated board members with a new layer of oversight by a committee that will monitor his performance and plans to slash debt.

“Liberty is a very respected company within the global media sector,” said Mark Harrington, a media industry analyst with J.P. Morgan Chase & Co. “A sale from them or any of these companies would send a negative signal to the market.”

The market already reacted coolly to the filing. Vivendi’s American depositary receipts continued to slide on the New York Stock Exchange, falling $1.17 to $28.88 on Tuesday.

Liberty Media received 37.6 million shares in Vivendi last month as payment for part of Vivendi’s complex $11-billion acquisition of the film and television businesses of Barry Diller’s USA Networks Inc. Liberty owned stakes in USA Networks plus Multithematiques, a European TV production company.

A spokeswoman for Vivendi declined to comment on the filing. Representatives of Liberty Media could not be reached for comment.