UPDATE 1-BSkyB CFO sees the value in buying Tiscali UK

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LONDON, Dec 9 (Reuters) - British pay-TV group BSkyB (BSY.L) said on Tuesday it could make sense to buy the UK unit of Italian broadband operator Tiscali (TIS.MI) in order to vastly increase the number of households it can reach.

Tiscali shares jumped in response, closing up 8.4 percent at 0.738 euros, outperforming a 2.8 percent increase in the DJ Stoxx European media index .SXMP.

"At the moment, we only address 9 million homes, so Sky broadband products -- great value though they are -- only speak to customers who are willing to take the TV offering," Chief Financial Officer Andrew Griffith told an investor conference.

"Something like Tiscali would allow us to extend our offering and our services in a scale industry to another 16 million households, and that potentially could have value," he said at a UBS conference.

Tiscali said last month it was in talks with Sky about selling its British assets, but Sky has until now avoided public comment on the subject.

Media reports have put the value of Tiscali's UK assets at about 500 million pounds ($737 million).

Griffith qualified his remarks, monitored by Reuters via Webcast, by saying: "Any consolidation of broadband we look at through a pretty sceptical gaze, because I have no doubt that we can meet our organic targets alone."

But he added of Tiscali's British broadband business: "It's something that's very core, and very adjacent to existing processes and management layers that we've got, and of course would be in our core market, the UK."

Years of restructuring have shrunk Tiscali from a pan-European player to one focused on Britain and Italy, and the company has said for months it was interested in selling assets. (Reporting by Georgina Prodhan, editing by Will Waterman)