PARIS, April 8 French telecoms group Iliad is discussing the possible acquisition of bigger rival Bouygues Telecom, Le Parisien said on Tuesday.
Shares in both companies were up around 2 percent in early trading, among the top 10 gainers on Europe's STOXX Europe 600 index.
Parent Bouygues is seeking 8 billion euros ($11 billion) for its telecom business, the third-biggest operator in the French mobile market, whilst Iliad, the owner of newcomer Free Mobile, is prepared to pay 5 billion, the newspaper said.
Both companies declined to comment.
Vivendi on Saturday picked Numericable in preference to Bouygues to buy its SFR telecoms business, the second-biggest operator in the mobile market behind Orange , ending a month-long bidding battle. ($1=0.7277 euros) (Reporting by Alexandre Boksenbaum-Granier; Writing by James Regan; Editing by Greg Mahlich)