UPDATE 1-Market Chatter -- Corporate finance press digest

(Adds Vueling, IKB)

LONDON, March 31 (Reuters) - The following corporate finance-related stories involving U.S. and European companies were reported by media on Monday:

** Spanish low-cost airlines Vueling (VULG.MC) and Clickair have signed a memorandum to start talks on a merger, financial daily Cinco Dias reported.

To read more please double click on [nL31387045].

** German regional state-backed lender BayernLB [BAYLB.UL] wants to buy part of stricken bank IKB IKBG.DE, the Frankfurter Allgemeine Zeitung reported. [nL31382072]

** India's Hinduja Group is in talks to buy a controlling stake in French auto parts maker Valeo (VLOF.PA) in a deal that is expected to be worth about $1.5 billion, the Business Standard reported. Executives from Hinduja, which controls India's No. 2 bus and truck maker, Ashok Leyland Ltd (ASOK.BO), met the top team at Valeo in Paris last week, the paper said. [nBOM66179].

** Two bidders, Vion and CCMP, have gone through to the final round of the sale of food group Grampian, which is to pick an exclusive bidder this week as the 400 million pound ($799.2 million) sale enters its final stages, the Times reported.

** A mystery investor has taken a 7.9 percent stake in Moss Bros (MOSB.L) -- which has already received an indicative approach from Bauger -- in a move that analysts believe increases the chances of a counter-bid for the company, the Daily Telegraph reported.

** Former Priory Group chief executive Chris Patel has sold the bulk of his remaining stake in the hospital group in a move that should quash long-running speculation the entrepreneur would partner a financial backer to buy the company, the Financial Times reported.

** New Star Asset Management NSAM.L is to launch an Indian joint venture with Ratan Tata, the businessman who last week bought Jaguar and Land Rover, the Independent and Sunday Telegraph reported.

** Bank of America (BAC.N) is considering scrapping the sale of its equities prime brokerage unit after receiving lukewarm interest from potential bidders, the Financial Times reported on its Web site on Sunday. The newspaper said no final decision on the prime brokerage unit, which has been up for sale for more than three months, had been made. [nN30345138] (Reporting by Laurence Fletcher; Editing by David Holmes)