UPDATE 2-TNT in partnership talks with Holtzbrinck

* Talks focus on distribution partnership

* TNT says still interested in German market

* Options include partnership or acquisitions

* TNT shares up 1.6 pct

(Adds spokesman's comments, shares, background)

By Aaron Gray-Block

AMSTERDAM, May 19 (Reuters) - Dutch mail company TNT NV TNT.AS said on Tuesday it was in talks with the German publishing house Georg von Holtzbrinck about forming a possible distribution partnership.

"Although there is still no level playing field in the German postal market, due to the ongoing uncertainties regarding minimum wage and VAT, TNT remains interested to strengthen its current position," TNT said in a statement.

TNT, Europe's second-largest mail and express group after Deutsche Post (DPWGn.DE), said it issued its statement to confirm earlier reports in the German press.

German business daily Financial Times Deutschland had earlier reported, citing no sources, that the family-owned company Holtzbrinck was looking for a partner for its post business and was in negotiations with Dutch TNT.

The report added TNT would get 50 percent of Berlin-based PIN Mail AG and 25 percent each of Holtzbrinck's other regional postal services.

"We are in the midst of talks to see how a transaction can take shape," TNT spokesman Ernst Moeksis said. "The scenarios involve a partnership, using networks or taking a part in a company."

TNT has been battling against what it says is unfair competition in Germany, where Deutsche Post enjoys an exemption on VAT payments. TNT is also locked in a dispute over minimum wage requirements in Germany.

But the spokesman said a partnership with Holtzbrinck would help TNT protect its investment in Germany as it could use Holtzbrinck's network, boosting TNT's own postal service.

TNT has previously raised concerns about its investment in the country.

Shares in TNT were up 1.6 percent at 14.02 euros at 1525 GMT, compared with a 2.1 percent rise in the with DJ Stoxx industrial goods and services index .SXNP.

TNT Post has been operating on the German postal market for almost 10 years, building up its distribution networks via partners and acquiring shares in several distribution companies.

Besides Holtzbrinck, TNT has also said it is following British plans to partly privatise Royal Mail and is still investigating possibilities for a deal with the group. (Editing by Hans Peters and Will Waterman)