UPDATE 1- Market Chatter -- Corporate finance press digest

(Adds Somerfield, HSBC, Microsoft, jobs)

LONDON, March 3 (Reuters) - The following corporate finance-related stories involving U.S. and European companies were reported by media over the weekend and on Monday:

** UK convenience store chain Somerfield, which is for sale and could fetch as much as 2.5 billion pounds, is likely to be broken up rather than bought as a whole, the Daily Telegraph reported.

** Europe's largest bank HSBC (HSBA.L) has considered selling or spinning off its U.S. unit as it faces pressure from activist investor Knight Vinke, the Daily Telegraph reported.

** U.S.-based software giant Microsoft (MSFT.O) is planning to nominate new members to the board of takeover target Yahoo (YHOO.O) in an attempt to force a boardroom coup unless the silicon valley company enters "serious" talks or agrees a deal, the Times newspaper reported.

** The total number of jobs at risk in London's financial sector from the current market crisis could be higher than so far anticipated, with as many as 10,000 jobs set to be cut this year, the Financial Times reported, citing forecasters.

** Russian miner and steel maker Mechel (MTL.N) (MTLR.RTS) is in talks to acquire Oriel Resources OLR.L ORL.TO, a London-listed miner with chrome assets in Russia and Kazakhstan, Russian newspaper Vedomosti reported on Monday.

** Private equity group Cinven [CINV.UL] has approached Land Securities (LAND.L), Britain's biggest real estate company, about a takeover of its property outsourcing arm Trillium, the Sunday Telegraph reported.

** Italian designer Giorgio Armani's fashion group is in talks with L'Oreal (OREP.PA) about the French cosmetics company possibly taking a stake in it, Milano Finanza reported on Saturday.