TORONTO - Montreal's Bronfman family has sold about one-fifth of its stake in Paris-based Vivendi Universal for $1.67 billion but remains the company's biggest shareholder.

Less than a year after Canada's biggest merger of 2000, Paris-based Vivendi said late Tuesday it bought the block of 16.9 million shares at a price of 75.1 euros - or about $99 Cdn - each.

This sale by the Bronfman family reflects a desire to diversify the family's investment portfolio, Vivendi said.

The sale involves less than two per cent of the company's stock and the Bronfmans and related charitable entities will still hold about 6.1 per cent, continuing to be the largest Vivendi shareholder.

Last June, Vivendi acquired the Bronfmans' Seagram Co. for $49.5 billion. The huge Canadian company had diversified from liquor into the entertainment business with its acquisition of the Universal music and film businesses in the late 1990s.

I understand the Bronfman family's desire to diversify their family holdings, Vivendi Universal chief executive Jean-Marie Messier said in a release.

This is a perfectly understandable family patrimonial decision after selling Seagram's control and at the end of the initial lockup period. It clearly does not imply any appreciation on current stock price, whose potential remains very high.

I am glad they renewed their commitment to the group prospects and they remain our largest shareholders, which avoids any overhang on our stock.

Among the shares sold, 15.4 million were sold by entities related to Edgar Bronfman Sr.'s family, including one million by family charities. Also, 1.5 million shares were sold by the Claridge Foundation, a charity related to brother Charles Bronfman's family.

Commenting on the sale, Edgar Bronfman Jr. - Vivendi's executive vice-chairman - noted: Entities related to my family, which continue to own approximately 33 million shares of Vivendi Universal, have committed with the company not to sell or hedge shares for the remainder of 2001, and in any case, my family has no plans for further sales.

He said the family is very supportive of the strategy, direction, pace and performance of Vivendi Universal. Charles Bronfman echoed those sentiments in a release.

Vivendi Universal, which started out as - and continues to be - a major water company, is one of the world's biggest entertainment and multimedia companies.

On the New York Stock Exchange, Vivendi shares closed Tuesday at $65.75, down $1.20.