VIVENDI TO SPLIT FROM MURDOCH

Vivendi, in the midst of purchasing Seagram and its Universal Music Group subsidiary, will cut all ties to Rupert Murdoch's News Corp. in order to establish its own transatlantic media and communications business.

Vivendi Chairman Jean-Marie Messier has opted against a long-term alliance in digital media with Murdoch, and will sell off Vivendi's stake in Murdoch's U.K. satellite broadcaster British Sky Broadcasting, according to the Financial Times.

According to the published report, Messier has discarded the idea of using the BSkyB shareholding to get a strategic stake in Murdoch's planned digital business, Sky Global Networks. Instead, he is seeking to sell the company's 22.7% BSkyB holding for cash or to swap it for other media or communications assets. He said he would not sell the stock on to the open market in order to keep its price healthy.

Messier last month pledged to offer up his stake in BSkyB to secure regulatory clearance from the European Commission for the Seagram deal. But he left the possibility of folding it into Sky Global open.

He has since chosen to exit the Murdoch venture so it doesn't interfere with EC regulatory approval of the planned Vivendi-Seagram deal.

"We always stated that we would not stay as a minority passive investor," Messier told the Financial Times. "Being an active partner of Murdoch is not easy. If you add the EU issue... it is just too complex to extract value."