Vivendi Universal has handed over its 23% stake in Europe's richest pay-TV group BSkyB to an unnamed investment firm, believed to be Deutsche Bank.

The move came only hours before BSkyB announced that it would switch off its analogue signal at midnight (Sept 27), some 15 months ahead of its planned December 2002 schedule and 12 years after its launch.

The share manoeuvring, which allows Vivendi to comply with the terms of its merger authorisation by the European Commission, in practice is a Euros4.2bn loan with the shares used as collateral. It is not intended that Vivendi take back the shares and it will have no beneficial ownership by 2005 at the latest. But it will also allow Vivendi Universal to generate a profit by the end of the financial year, with the amount generated dependent on BSkyB's share price.

Using the shares for a loan removes the opportunity for Vivendi to swap the stake for shares in North American companies as had until recently seemed likely. It had been expected to exchange the shares for shares in Barry Diller's USA Networks, in which it already has a 43% holding. But plunging share prices have made that a less attractive strategy.

BSkyB shares reacted well to the news, climbing 4% to £6.25 as the prospect of a forced sale diminished. The shares were also boosted by a report from leading media analyst Neil Blackley at Merrill Lynch, which said that the switch from analogue to digital would only cost the firm 100,000 subscribers. Blackley had originally forecast 400,000.

At 30 June 2001, there were 5.3 million subscribers to Sky digital and 145,000 remaining subscribers to the analogue service.

Vivendi shares fell 3% to Euros8.42 although the company today confirmed that it was on target to meet sales and profit targets for the current year.