Shares in the media giant Vivendi Universal have fallen sharply for the third day in a row, amid reports the firm may dispose of its prized US entertainment division.

By the close of trading, Vivendi shares were down more than 12%, taking losses to 45% during the week, and more than 80% since the start of this year.

Late on Friday, the Financial Times reported that Vivendi was considering demerging and floating its US music and film businesses on the stock market.

Disposing of the entertainment division, which would signal a retreat from former Vivendi boss Jean Marie Messier's aim of creating a globa media and entertainment giant, could be discussed by Vivendi directors at a meeting on 25 September.

The latest slump in Vivendi's share price followed news on Thursday that the company had failed to secure a deal for a 3bn euros(�1.92bn; $2.96bn) loan.

This prompted investment banks UBS and Deutsche Bank to cut their ratings on the firm.

Friday's falls took the market capitalisation of once-mighty Vivendi to below 10bn euros, less than the estimated value of its various assets.

Heavy debts

On Wednesday the shares lost one-quarter of their value on both sides of the Atlantic after Vivendi announced a hefty loss of 12.3bn euros in the first half of 2002.

That prompted credit rating agencies to downgrade the company's credit and debt ratings - which will make it more expensive to pay off debts.

Vivendi Universal has debts of 19bn euros but if the utilities arm, Vivendi Environnement, is included the debts amount to 35bn euros.

The company said it was planning to sell 10bn euros worth of assets to try to reduce that figure.

According to French media reports, the firm will follow up its planned sale of US publisher Houghton Mifflin with the sale of the rest of its publishing assets.

Vivendi has been under a new management team since the controversial former chief executive, Jean-Marie Messier, was ousted in a boardroom coup in July.